Deficit down but debt up as usual

The budget proposal will now head to the Tripartite Commission and on September 28 it will be reviewed by the Cabinet before final approval. Central budget expenditure is expected to grow to zł.207.7 billion-that is, at a rate slower than GDP growth. But revenues are expected to increase at a faster pace, reaching zł.172.775 billion and leaving the deficit at zł.35 billion. The budget envisages an increase in spending on social services, justice, education and science, with some tightening in several other categories. Despite the deficit reduction, public debt-as measured using the domestic definition-shall nevertheless increase from the expected 53.5 percent of GDP at the end of this year to around 56.6 percent at the end of 2005. The budget is based on previously announced assumptions of five percent real GDP growth and 3 percent inflation in 2005. (Poland AM, September 10)