Government urged to be stricter as high budget deficit threatens economy

Maintaining a high budget deficit against a background of poor economic growth over the next few years will pose the danger of public debt exceeding 60% of gross domestic product (GDP), warned the Institute for Market Economy Research (IBnGR) in its report on the condition of public finances, 2001-2002. While the IBnGR analysts raise no particular objection to any budget undertaking, they indicate that maintaining a 5% deficit over the next few years could prove dangerous for the economy. "The rationalization of social spending, cutting public administration expenses and the consolidation of public financial means, that is the way to balance the budget and reduce the deficit," reads the report. Head of the IBnGR, Wojciech Misiag, pointed out that budget revenues in 2001 were 13% lower than expected, the biggest shortfall recorded since 1991, and he urged the government to act with greater severity. (Prawo i Gospodarka, p. 4; Rzeczpospolita, p. B2) M.K.