16:29 13 May 2025
Ministry of Finance tapping liquidity cushion as budget deficit grows
Poland’s Ministry of Finance is using its liquidity cushion—formerly PLN 204 billion in February, now down to PLN 175 billion—to cover rising borrowing needs amid a rapidly growing budget deficit. The shortfall reached over PLN 76 billion by March, 26% of the annual limit. Despite record bond sales, the ministry is drawing from reserves due to lower tax revenues (e.g., PIT down by PLN 28 billion) and increased spending, especially in healthcare.
Economist Mateusz Sutowicz notes this decline in reserves contrasts with strong bond issuance and expects the government to continue aggressive borrowing to meet 2024 needs and start pre-financing 2025. Polish banks remain key buyers, benefiting from bond tax exemptions and excess liquidity.
(pb.pl)
