Government agrees on budget deficit amid warnings and a resignation

The cabinet voted to accept next year's budget with a deficit amounting to zl. 43 billion. This was higher than the zl. 40 billion the Finance Minster, who handed in his resignation, had wanted. The budget issue has become particularly thorny for many reasons, for example the government will have to find more money to co-finance EU grants. The budget deficit will amount to 5.5% of GDP, up from 5.4% this year. The budget is based on the assumption that GDP growth will be 3.1%, up from the 1% previously envisaged by the government. Cezary Jozefiak, a member of the Monetary Policy Council, commenting on the planned budget deficit said, "Now there is a threat that there will be a clear slowdown in the pace of cutting interest rates". (Prawo i gospodarka, pp. 1, 6; Reuters)