EC higher deficit

The European Commission raised expected GDP growth for Poland to 3.5 percent for this and next year and 2018, thus the forecast has not changed compared with the previous one. However, the EC is concerned about Poland's general government debt. In the Spring edition (2015) of the report, the EC predicted Poland's economy to grow by 3.3 percent this year, by 3.4 percent next year and to remain at 3.4 percent in 2017. Poland's budget deficit is to remain at 3 percent of GDP this year, however it may grow to 3.4 percent in 2017, the EC predicted. "The forecast regarding the general government debt does not include the government's operations aimed to strenghten the income side," the Polish Ministry of Finance commented. This year, Poland (alongside Romania) is to be Europe's fourth fastest growing economy, after Ireland, Malta and the Czech Republic. Economic activity is set to remain robust on the back of solid domestic demand, bolstered by improving labor market conditions and rising disposable income. The Russia-Ukraine crisis and weak demand in the euro area are now forecast to have a smaller impact than previously expected. Consumer prices should start rising again moderately, on the back of base effects in food prices and robust domestic demand inflation is expected to stand at 0.6 percent this year and to increase to 1.7 percent next year (a little higher than previously predicted), the EC also reported.