Government adopts draft budget for 2024. Planned deficit at 184 billion zlotys

At a press conference on Tuesday (Dec.19), Poland's new Minister of Finance Andrzej Domański and Prime Minister Donald Tusk presented the key points of the draft state budget for 2024, adopted earlier that day by the cabinet.

"This year's spending planned in the budget for 2024 is 866 billion zlotys, while the revenue is 682 billion zlotys, and that means a budget deficit at around 184 billion zlotys," Domański said at the conference.

The minister assured that the government would spare no effort to curb the budget deficit growth. He added that the new government would conduct a thorough audit within all ministries in search of "natural savings".

"We shall strive to limit the deficit in the coming years," Domański stressed.

"We forecast an increase in revenue from all taxes," the minister announced, adding that there would be funds in the 2024 budget to finance "the crucial programs".

"The deficit of the so-called general government sector stands at 5.1% of the GDP, which means we are in line with the minimal fiscal effort recommended by the European Commission," Domański said.

He also informed that the net borrowing requirements in 2024 would amount to 250 billion zlotys.

Commenting on the Polish zloty exchange rate, the minister said that what had been happening on the markets after the Oct.15 election sent a "clear signal".

"The zloty has clearly strengthened, which is related with the expected influx of cash from the KPO (Poland's recovery and resilience plan) and the expected pro-European stance of the government," he explained.

Domański also noted that although a strong zloty was helpful in tackling high inflation, it had a negative impact on the profitability of Polish exports, which - in his view - could be "a certain challenge" in 2024.

"The 800 plus financing is there, there is money in the budget, it will be paid out. The 13th and 14th pensions will be paid out, there is money for it in the budget," PM Tusk said at the conference. "The double indexation of pensions and allowances in case of inflation higher than 5% - and this year is such a case - the money for it has been secured," he assured.

He added that it was not an easy task to ensure the money was there, "but a promise made must be kept and so we've made this decision without unnecessary debating".

"In the budget we ensure a 20% increase in remuneration and wages, including the notional amounts, for all employees of the state budget sphere," Tusk announced.

Furthermore, the prime minister said the budget assumed a 30% increase in the average wages teachers, including academic teachers, and a 33% increase for beginning teachers.

An additional 2.3 billion is to spent on wage increase for pre-school teachers.