The Gdansk Institute for Market Economics (IBnGR) made a research of public finances in 2006 and of this year’s budget.
“Everything looks nice at first: in 2006, the revenues were 1.2 percent higher and expenditures 0.4 percent lower than planned”, Wojciech Misiag, IBnGR economist said.
That’s why the deficit was 7.6 percent, or PLN 3.3 billion (EUR 851.4m) lower than planned and amounted to PLN 40 billion, or 3.8 percent of the estimated GDP. However, the savings are too low, according to Wojciech Misiag.
“There are many worrying factors in public finances. Despite higher revenues and lower spending in 2006, expenditures to finance the deficit were increased”, Wojciech Misiag pointed out.
In his opinion, the reason was low privatization: instead of PLN 5.5 billion of revenues, the state sold enterprises worth PLN 622m. The country increased its debt. In the first three quarters of 2006, the debt amounted to PLN 504 billion, or 48 percent of GDP. According to IBnGR experts, it should not exceed 50 percent of GDP this year. But it won’t be lower than last year.
“We estimated that public debt will grow from 3.6 to 4.2 percent of GDP. Despite warnings from the European Commission, we have been unable to make it below 3 percent. We do nothing to achieve it despite very advantageous macro environment. And the economic growth we have today may not be easy to achieve in the next 10 years”, IBnGR expert believed.
(PLN 1 = EUR 0.258)