Budget 2024. Ministry of Finance very close to the decision on possible amendment of the budget for '24 – Minister of Finance

– Not yet (no decision on the amendment – ed.), but we are very, very close. We have additional information on budget execution in September; Due to the flood situation and the need to provide financing to local governments this year, the probability of an amendment is clearly increasing. (…) The decision has not been made yet – said Domański.

Domański explained in the context of the potential amendment that the lower implementation of VAT revenues to the budget compared to the plan in the current year results from the lower forecast inflation than originally assumed in the 2024 budget (6.6% vs. 3.7% currently), as well as from lower retail sales dynamics.

– From almost everyone's point of view, lower inflation is good news, of course not from the point of view of VAT revenues – said Domański. – Retail sales in Poland are growing, but not as dynamically as expected. Propensity to save supported by high interest rates is tall. (…) Retail sales are not growing as fast as forecast and this also translates into slightly lower VAT realizations, he added.

The minister emphasized that VAT revenues are growing double-digitly from month to month and there is no y-o-y decline in this category, only lower implementation compared to the plan. The head of the Ministry of Finance also pointed out that the prices of CO2 emission allowances are lower than expected, which means a loss of almost PLN 8 billion for the Ministry of Economy compared to the plan.

Domański also drew attention to lower CIT revenues, mainly due to the condition of exporters.

– In CIT – there are some one-off events (…) like Orlen, but what really worries me is the condition of the countries euro zone. We see from the exporters what is happening. Relatively strong zloty – we see the ECB cuts rates, the Fed cuts, and our interest rates remain unchanged. I do not evaluate the NBP's policy, but this translates into a strong zloty, which does not help exporters. The latest reading doesn't help them either GDP German at the level of 0.3 percent YoY in Q2, 0.6% in the euro zone, it just hurts. Then we see it in CIT – he said.

He added that the strong zloty is a “serious problem” reported by exporters in surveys. He emphasized that the Ministry of Finance does not conduct exchange rate policy.

Referring to the assumption from the medium-term budgetary and structural plan until 2028 to freeze the current tax brackets PITDomański pointed out that the plan will be subject to annual evaluation and was adopted under the current conditions and current legislation.

– It in no way determines what actions may be taken in the future. Of course, what is determined in the plan is the deficit path (…). The expense path is defined there. This is crucial for the EC. Here I want to say clearly – these expenses are increasing in Poland from year to year – he said.

According to the Minister of Finance, the market will start to upwardly revise GDP growth forecasts for next year.

– This year we see GDP growth around 3.0, next year 3.9%. In a moment, some institutions will increase their growth forecasts for 2025, because the impact of the KPO is probably underestimated – said Domański. The Ministry of Finance is ready to discuss solutions supporting the development of the IT or AI sector in Poland.

– I am ready to discuss any solutions, including tax ones, that would actually increase the level of absorption of IT or AI solutions in the economy. (…) These solutions already exist, and yet the goal has not been achieved. This is probably a broader discussion about what we can do about it. Besides, the robotization of the Polish economy – we have one of the lowest robotization density in the industrial processing sector in the EU – said Domański.

Ministry of Finance reported this week that the state budget deficit after September amounted to over PLN 107 billion, which constitutes approximately 58 percent of the plan for 2024.

Income amounted to PLN 460.2 billion, or 67.4 percent. plan.

Expenses amounted to PLN 567.48 billion, or 65.5%. plan.

In the period January – September 2024, state budget revenues amounted to approximately PLN 460.2 billion and were higher by approximately PLN 42.2 billion (i.e. 10.1%) compared to the same period of the previous year (418, PLN 0 billion, i.e. 69.5% of the plan).

The implementation of state budget expenditure in the period January – September 2024 amounted to approximately PLN 567.5 billion, i.e. 65.5%. plan, at the same time it was higher by approximately PLN 114.8 billion (i.e. 25.4%) compared to the same period in 2023 (PLN 452.7 billion, i.e. 65.3% of the plan).