Poland will drive its public finance sector debt up to PLN 924.7 bln or 49% of GDP by end-2016 from 48.4% expected end-2015 before it stabilizes in 2017 and declines further out to 47.5% in 2019, the government said of a debt management strategy update approved by the cabinet Tuesday.
Rejigged to the EU’s preferred methodology ESA2010, general government debt will rise through 2017 to peak at 52.1% of GDP, a rise attributed mainly to debt taken on for the National Road Fund KFD, the government’s press center said in its statement.
A public finance sector debt above 48% of GDP by the Polish definition triggers a reduction in the rate of growth in Poland’s spending cap by 2 pps, according to the terms Polish public finance law.
Poland will sport a public finance sector deficit at 2.8% of GDP in 2016, largely matching the 2015 count, Finance Minister Mateusz Szczurek said of his 2016 budget, just approved by the cabinet.
“By our estimates, the public finance sector deficit in 2016, counted according to the EU methodology, will measure 2.8% of GDP and that is a similar level as in this year,” he said.
Comments follow approval of the 2016 budget bill by the cabinet with the headline central budget deficit cap at PLN 54.6 bln, an 18.5% increase on the 2015 projected gap. The public finance sector or general government deficit includes a broader swath of public institutions, including notably local government and social security and is used for measuring compliance with EU fiscal standards.