📈 Fed's first cut since 2020: Time to buy the dip? See Tech-focused stock picksUnlock AI Picks

Poland aims for narrower fiscal deficit in 2015 - government document

Published 14/04/2014, 11:27

By Pawel Sobczak

WARSAW (Reuters) - Poland plans to cut its fiscal deficit to 2.5 percent of economic output in 2015, a smaller shortfall than previously planned and currently forecast by the European Commission, a draft government document seen by Reuters showed.

Poland, the largest economy in central and eastern Europe, is under the Commission's excessive deficit procedure and has been given until 2015 to cut its fiscal gap to below the target ceiling of 3 percent of GDP.

Countries under the excessive deficit procedure must present updates each year on their deficit reduction plans, also called "convergence programmes".

Reuters has seen a copy of this year's update for Poland, which must be approved by the government by the end of April and then sent to Brussels.

Poland's update for this year, seen by Reuters, showed that last year's general government deficit, calculated using the European System of Accounts 1995 standard, stood at 4.3 percent of GDP.

In 2014, Poland expects to jump to a 5.8 percent fiscal surplus thanks to an overhaul of its pension system, and it sees deficits of 2.5 percent in 2015 and 1.8 percent in 2016.

The current convergence programme envisages a deficit next year of 2.7 percent of GDP.

The European Commission currently forecasts Poland's 2015 deficit at 2.9 percent of GDP.

The more ambitious deficit targets signal Poland is more confident about its growth and fiscal revenue prospects. The country had earlier planned to exit the deficit procedure in 2014, but an economic slowdown forced it to revise last year's budget and ask the Commission for more time.

Poland has already financed 70 percent of its 2014 borrowing needs, and finance ministry officials said the improving economy could lead to higher than expected fiscal revenues this year.

The draft of the document also shows that the government sees economic growth accelerating to 3.8 percent in 2015 from 3.3 percent in 2014.

Separately, a government source told Reuters that Poland plans to return to lower value-added tax (VAT) rates in 2017. Poland will also unfreeze the wage fund in the public sector that year.

Poland's deficit peaked at nearly 8 percent of GDP in 2010.

(Reporting by Pawel Sobczak; Writing by Marcin Goettig; Editing by Hugh Lawson)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.