Due to the scale of problems in public finances, their repairment requires time and will be carried out gradually - Poland's Finance Minister Andrzej Domański said on Monday (April 29). The ministry has just published a white paper on Polish public finances in 2016-2023, in which it warns that Poland's public debt in 2026 and 2027 is likely to exceed 60% of the country's gross domestic product (GDP) The Polish constitution allows a maximum public debt no higher than three-fifths of the GDP.
The Ministry of Finance on Monday (April 29) published the White Book of Public Finances in 2016-2023.
"Due to the scale of problems in public finances, their repairment requires time and will be carried out gradually," Finance Minister Andrzej Domański told reporters on Monday.
Debt out of control
According to the white paper, Poland's development bank BGK (Bank Gospodarstwa Krajowego - edit.) has opened 15 new funds since 2015, which increased budget spending by 100 billion zlotys. Minister Domański said that between 2015-2023 public debt outside parliamentary control increased from 46.1 billion zlotys up to 363.1 billion in 2023.
Domański added that in 2016-2023 Poland had introduced 22 new taxes and contributions.
The White Book of Public Finances, we read, was published "to present the true state of the state treasure at the end of 2023 and to initiate a debate on how to improve the public finances management".
"Unfortunately, in recent years, taxes have largely increased, the rationality of spending has decreased, and the public debt, according to EU mothodology, has entered a path towards exceeding the threshold of 60% of the gross domestic product (GDP)" - the ministry said.
Constitutional public debt limit
According to the Constitution of Poland, it is not allowed "to contract loans nor provide guarantees and financial sureties which would engender a national public debt exceeding three-fifths (60% - edit.) of the value of the annual gross domestic product".
However, Polish regulations define public debt components using a different methodology than that of the European Union, thus making the final outcome lower.
According to the "Protocol on the Excessive deficit procedure" (EDP), annexed to the Maastricht Treaty on economic and monetary union, Member States in the euro area and euro area candidate countries must demonstrate sound public finances.
There are two criteria: the budget deficit must not exceed 3% of gross domestic product (GDP) and public debt must not exceed 60% of GDP.
The finance ministry data state that Poland's government debt at the end of the Q4 of 2023 was at 39.1%, while the EU'S EDP methodology says the debt was at 49.8%.
Źródło: TVN24 News in English, PAP, tvn24.pl
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