Poland's government approves budget draft for 2014
September 9, 2013
Finance Minister Jacek Rostowski and PM Donald Tusk
The Polish government has adopted provisions for the country's 2014 budget with the deficit narrowing after a revamp of private pension scheme.
The budget draft was approved two days after government officials presented proposals for the pension system reform to trim public debt and allow higher spending. The proposed changes assume transferring more than half of private pension fund assets to the state.
Recently proposed changes to the pension system "required very significant changes in the budget," Rostowski said at the press conference on Friday. "A result of these changes can be seen most clearly in the changes in budget deficit which came down from PLN 51.6 billion to PLN 47.7 billion."
Spending is planned at PLN 324.2 billion, with revenues at PLN 276.5 billion, the minister added.
PM Donald Tusk said at the same conference that the budget is cautious and next year the government will still have to seek revenues, after it had to raise the 2013 deficit by 24 billion zlotys this year, to reach 51.6 billion zlotys. Among new sources of income is a 15% increase in excise tax on liquors.
The budget draft is still based on assumption of 2.5% GDP growth and 2.4% average annual inflation in 2014, Rostowski said.
The revamp will cut Poland's debt to GDP ratio by some 8% and will result in gross borrowing needs in the next two years will be lower by PLN 18.9 billion and PLN 15.7 billion, the Finance Ministry said.