Polish government pushes through budget amendment
The Polish government decided last week to increase this year's budget deficit, previously estimated at zl.20.5 billion ($4.9 billion), by almost zl.8.6 billion. At the same time, it announced that public spending would be slashed by zl.7.5 billion.
The budget amendment will be submitted to parliament this week. Following the announcement, the National Bank of Poland (NBP) president Leszek Balcerowicz urged the government not to increase the budget deficit by more than the proposed zl.8.6 billion, since otherwise it would face the possibility of higher borrowing costs.
According to analysts, even if parliament accepts the amendment, the budget will still be under threat, since its full implementation relies heavily on the zl.18 billion of income from the privatisation of State assets. Taking a longer-term view, Monetary Policy Council (RPP) member Boguslaw Grabowski said Poland needs complex public funding reform, and the present condition of the budget should be a warning for the coming years.
