The government will likely drop plans for introducing a spending cap on local authorities as existing regulations have proved sufficient in terms of cutting deficits, Finance Ministry chief economist Ludwik Kotecki told reporters Tuesday.

"In a period of downturn there is no need to bring in additional restrictions on local government," Kotecki said.

The government had been planning to introduce a rule capping local government spending at PLN 10.5 billion in 2012, PLN 10 billion in 2013, PLN 9 billion in 2014 and at 0.5% of GDP as of 2015.