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Monday, December 11, 2023

Big challenges ahead of the new government. “The draft budget for next year raises a lot of concerns”

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Among the urgent and very urgent issues for the new government, one is crucial: the budget for next year. This will not be a gift from PiS. According to experts, the ruling party spent billions outside the budget. She hid some of it in special funds, and Poland’s debt is two trillion zlotys.

It is not only politicians from the current opposition who say that the outgoing government is leaving a real minefield in the state’s finances. – The draft budget for next year itself raises a lot of concerns, the deficit will increase by 80 percent, the public debt will reach PLN 2 trillion, but the implementation of the budget for this year is also worrying – says Andrzej Domański from the Civic Coalition.

Mateusz Morawiecki liked to boast that the money for all social expenses, checks, comes from the fight against the VAT mafia. However, VAT revenues in this year’s budget were significantly overestimated. We will face either spending cuts or greater debt, and certainly change. – The election results quite clearly constitute a call to end this era of joyful disco polo in the Polish economy. Indeed, the condition of the Polish economy is at least poor, says Prof. Aneta Zelek, economist from the West Pomeranian Business School in Szczecin.

Politicians who take power compare what the current government leaves them with the state of the country from eight years ago, when they gave up power. – GDP 3.9 percent, i.e. good economic growth dynamics. They are giving us back the economy at zero percent of GDP. We gave them stable finances after exiting the excessive deficit procedure. They will pay us back immediately with a deficit that exceeds all permissible standards, says Izabela Leszczyna, an MP from the Civic Coalition.

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Central Statistical Office: inflation in September was 8.2 percent year-on-yearJacek Tacik/Fakty TVN

Questions about frozen energy and gas prices

The challenge is how to fight inflation and the recession that we have practically fallen into in the current situation, how to get back on the path of economic growth and, above all, how to control the state’s finances. – So far, we have dealt with creative accounting in the negative sense of the word, even bordering on falsifying financial statements – says Prof. Marcin Kalinowski, economist from WSB Merito University.

As we hear, next year’s budget planned by PiS is unrealistic, a lot of expenses were hidden outside it, the debt is already expected to exceed PLN 2 trillion. – We have a risk that something may be happening there that we don’t know about: for example, from what I hear, the Polish Development Fund has problems with rolling over bonds, which means it is unable to issue new ones to pay off its old liabilities and such there may be a whole lot – says Ryszard Petru, MP of the Third Way.

The next reefs prepared by those leaving are not only another increase in the minimum wage. In the new year, the lower VAT on food will probably cease to apply. What next with frozen energy and gas prices?

– The problem of deciding whether energy prices will be artificially frozen next year will probably fall on the next government, formed by the opposition parties. It will be a difficult decision – says Robert Tomaszewski, energy analyst, Polityka Insight.

Without intervention, our bills could increase by several dozen percent. Fuel prices are already starting to become more expensive, and all this will translate into inflation.

Main photo source: TVN24

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