It is always difficult to design a budget with falling inflation, because expenditure expectations are generated by historically high inflation, said Mateusz Walewski, chief economist of Bank Gospodarstwa Krajowego, assessing the draft budget for 2024. It assumed that inflation would fall to 6.6 percent on average annually from 12 percent in 2023.
On Thursday, the government adopted the draft budget act for 2024. In the draft, the Ministry of Finance forecasts that next year state budget revenues will amount to PLN 683.6 billion, the state budget expenditure limit is set at PLN 848.3 billion and the deficit will not exceed PLN 164.8 billion. It was indicated that in 2024 there will be an economic recovery and growth GDP should reach 3%.
The budget deficit is higher than planned
– A budget is always difficult to design with a falling one inflation, because expenditure expectations are generated by historically high inflation, and the actual income will be in line with the decreasing inflation – said the chief economist of BGK. As Walewski reported, budget deficit is slightly higher than the one planned in the Convergence Program Update, where it was assumed to amount to 3.4 percent. GDP, while in the draft budget for next year it is expected to be 4.5 percent. GDP. He added that this is consistent with the repeated announcements of public finance consolidation, which consists, among other things, in returning part of the expenses, which are currently financed from funds located mainly in BGK, to the central budget.
Budget salary increase
In the opinion of the expert, the best information from the draft budget is the increase in salaries for the public sector. – This is very important, because in order to maintain the quality of human resources, the quality of staff working in the budget sphere, it is necessary to increase their salaries so that they are competitive with wages in the private sector market – he said. In the draft budget for the next year, it was assumed that the increase in salaries in the budget sector would amount to 12.3 percent. Walewski also estimated that the assumed GDP growth of 3 percent. in 2024, which we learned in June this year during the publication of the budget assumptions, is realistic and consistent with market forecasts.
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