9:49 25 November 2023
Poland's public deficit and debt growing dangerously fast
While Poland's debt concerning GDP is not currently high compared to other countries, it is expected to increase rapidly, and the deficit is projected to remain above the permissible threshold of 3% of GDP for several years. This poses the risk of subjecting Poland to the EU's excessive deficit procedure, which would prevent the new government from increasing public spending without reducing already planned expenditures or raising taxes. According to former Deputy Minister of Finance, Professor Stanisław Gomułka from the Business Centre Club (BCC), urgent corrective actions are necessary to prevent Poland's debt from exceeding the constitutional threshold of 60 percent of GDP. High debt not only implies higher costs of servicing it but also leads to a loss of credibility. This, in turn, results in an increase in the profitability of Polish bonds, raising the costs of issuing new securities.
"At present, public finances are not in a crisis, but in a situation that could become critical, where legal and financial-political problems may arise. Certain state budget expenditures are not included in the budget and are not controlled by the Sejm," Professor Stanisław Gomułka said.
(Newseria)
