Szczurek, MinFin: Poland can put fiscal gap at just over 2.5% GDP in 2016

Poland won’t meet its prior target for a public sector deficit at 2.3% of GDP in 2016, but won’t miss the 2.5% mark by much and has plenty of room to the critical 3% threshold, Finance Minister Mateusz Szczurek told PAP.

A risk of public debt in excess of 48% of GDP exists that could trigger spending caps as written into Polish public finance law, he noted.

The initial 2.3% deficit target “could be very difficult to achieve,” Szczurek now admits, blaming trends in tax receipts now visible, not all of which will soften for 2016.

“I’m assuming,. though, that the deficit next year will be at a level only a bit over 2.5% of GDP and certainly therefore below the 3% mark,” Szczurek told PAP.

Poland’s April update to its convergence program had assumed a further reduction in the deficit to 2.3% of GDP in 2016 from 2.7% in 2015. Poland has since drafted a PLN 351.5 bln budget plan for 2016 calling for an 18.5% increase in the budget gap from levels plotted for 2015.

Poland faces the “possibility” that public debt will end up over the 48% of GDP mark, a key level in Polish public finance law mandating a cap on spending growth rates, Szczurek said.

“The risk exists,” Szczurek said of the end-2016 outlook.

kam / gty

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