The Finance Ministry's moving target
After surprisingly disappointing first quarter GDP and investment growth numbers, which suggested the roaring Polish tiger may be taking his timbre down a bit, the Finance Ministry may be changing its mind about the zł.30 billion budget deficit that it had suggested earlier. In cabinet consultations over the budget last week, the Finance Ministry proposed a range for the budget deficit with a maximum of zł.34 billion - just zł.1 billion less than this year's planned gap.
"In the assumptions for the 2006 budget bill, the Finance Ministry will present maximum and minimum ranges for revenues and spending," a government source said. "The deficit will be given in the range of zł.28-34 billion."
Economists say the change could reflect increasing worry over uncertain economic growth, and also made it more likely that the 2006 deficit will top the zł.30 billion mark.
"It does look likely that the deficit will now be higher than zł.30 billion and that of course will be negative for markets," said Janusz Jankowiak, chief economist with BRE Bank.
Poland's budget deficit this year is planned at zł.35 billion (though the FM projects it will come in somewhat less than that, at zł.33.45 billion), and next year's zł.5 billion slash was seen as a key component of Poland's attempt to enter the eurozone before 2010.
Political pressure on the Democratic Left Alliance (SLD) is growing ahead of parliamentary elections on September 25. Finance Minister Gronicki has already been forced to abandon plans to raise taxes on heating oil after a public outcry. (Reuters)
"In the assumptions for the 2006 budget bill, the Finance Ministry will present maximum and minimum ranges for revenues and spending," a government source said. "The deficit will be given in the range of zł.28-34 billion."
Economists say the change could reflect increasing worry over uncertain economic growth, and also made it more likely that the 2006 deficit will top the zł.30 billion mark.
"It does look likely that the deficit will now be higher than zł.30 billion and that of course will be negative for markets," said Janusz Jankowiak, chief economist with BRE Bank.
Poland's budget deficit this year is planned at zł.35 billion (though the FM projects it will come in somewhat less than that, at zł.33.45 billion), and next year's zł.5 billion slash was seen as a key component of Poland's attempt to enter the eurozone before 2010.
Political pressure on the Democratic Left Alliance (SLD) is growing ahead of parliamentary elections on September 25. Finance Minister Gronicki has already been forced to abandon plans to raise taxes on heating oil after a public outcry. (Reuters)
