Poland's gov't deficit seen falling to 3pct of GDP in 2015 – IMF
April 10, 2014
Poland's general government deficit will likely fall from 3.5% of GDP expected in 2014 to 3.0% in 2015 and further to 2.2% in 2016, the International Monetary Fund wrote in its fiscal monitoring report for April.
The IMF estimates 2013 deficit at 4.5% of GDP, based on end-Q3 budget realization data.
Poland's fiscal sensitivity assessment was kept at "average," the report showed.
In its October report the IMF envisaged a deficit reduction path from 4.6% in 2013 to 3.4% in 2014, 2.8% in 2015 and 2.5% in 2016.
Reduction of public finance sector deficit to 3% of GDP will open the door to the ERMII mechanism for Poland.
Deficit reduction to the required level will be possible without any radical moves, according to the Polish Finance Ministry. Major measures include continued freezing of wages in the budget sector, the implemented pension system reform and a taxpayer lottery aimed at reducing shadow economy.
ThePolish government will present its convergence program update to the European Commission on April 15. Deficit reduction will be the last but one convergence criterion, as Poland has already met the public debt, inflation and interest rates criteria.