Finance Minister fears forced spending cuts due to budget shortfalls

Finance Minister Jaroslaw Bauc admitted on Monday that the government would be forced to reduce spending as a result of poor budget revenues this year. "It will be much poorer in several thousand budget-funded agencies," he elaborated.The state budget may well be short some zl.7-10 billion due to lower than expected income tax and privatization revenues, say chief analysts at BIG BG and ING Bank. According to the ING analysis, the income tax gap could amount to zl.10 billion or even zl.15 billion if the Finance Minister does not carry out necessary spending cuts. Since the ministry can still postpone some investment spending for future years, reducing spending zl.6 billion is possible. The shortfalls could also be exacerbated bydelays in privatization, initially estimated to yield around zl.5 billion. However, according to Treasury Minister Aldona Kamela-Sowinska, obtaining the zl.18 billion anticipated from privatization this year is still possible. (Rzeczpospolita, pp. A1, B1; Reuters) M.T.