The budget surplus of PLN 30 billion after July means that the budget is in a comfortable position. This gives better prospects for the coming years – according to Lukasz Czernici, chief economist at the People’s Action Party’s Finance Ministry.
After July, the state budget surplus exceeded 30 billion PLN.
“We are now in a comfortable financial position. The good results in the budget came from a stronger economic recovery than we assumed last year and the effects of tax tightening, which proved successful during the economic slowdown. Last year, despite the 2.7 percent recession, the tax gap narrowed value added by 1.3 percentage points. Percentage” – ukasz Czernicki, chief economist at the Ministry of Finance told PAP.
He noted that during the last crisis in 2008, the situation was completely different. Then, within two years, Poland’s VAT gap more than halved.
“Looking at the data perspective on rapid economic growth and good tax revenue, I look at the coming years with more peace. This and next year we will deal with the so-called general exit clause, announced by the European Commission, suspending EU fiscal rules and allowing for increased spending. Likewise in The state of our national bases: We are currently on the path towards a stable spending base, which gives us additional fiscal space in the period of subsequent recovery and demolition,” said Dukas Czernici.
In his opinion, a return to national fiscal rules and EU rules will take place in 2023.
“High expenditures related to combating the consequences of the epidemic should end naturally, which will reduce our deficit, and instead, although not on this scale, there will be projects funded by KPO – neutral to the results of the fiscal sector, which will allow us to maintain growth “Such a situation will contribute to reducing debt to GDP,” said the chief economist of the Ministry of Finance.
He pointed out that not rushing to tighten fiscal policy was the result of experiences from the previous crisis. This lack of rush is advised, among others, by the OCED and the IMF. In his opinion, it is even possible to correct the financial rules of the European Union, and therefore also, the national financial rules.
I think it is worth creating additional space for investment expenditures, because the current form of financial rules in the European Union has led to a strong collapse in this area in many European countries. However, even without correcting the rules, the budget space in 2023 in terms of GDP will still be larger than it was before the pandemic. (PAP)
Author: Marek Ciudag
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