16:09 14 June 2024
Public Debt in Poland Growing Fastest in Years
Poland's public debt is growing at its fastest rate in years. In the first quarter of this year, it surged by 4.8 percent to PLN 1.77 trillion. The only time debt grew faster was during the exceptional circumstances of the 2020 pandemic. Excluding that period, the last time public debt increased so rapidly was in 2010.
The main reason for the current rise in public debt is a significant deficit in public finances, likely exceeding 5 percent of GDP. It's important to note a seasonal pattern: at the beginning of the year, the government typically borrows funds in advance, accumulating resources to be spent throughout the year. Consequently, debt usually increases more in the first half of the year than in the second.
About GDP, debt covering the entire public sector—including the budget, various off-budget funds, and local governments—has risen to 51.5 percent. This is the highest level in about two years but remains within the historical range of 45-55 percent of GDP over the past two decades. The debt dipped below this range only once in 2008, just before the global financial crisis, and exceeded 55 percent during the eurozone crisis in 2013 and the pandemic in 2020, both times characterized by weak economic growth or recession.
