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Friday, June 14, 2024

Economy. Jerzy Hausner in “Facts after facts” TVN24

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The budget act passed by the parliament, which economists criticized as unenforceable, confirms that this act was economically inconsistent – said Professor Jerzy Hausner, chairman of the Program Council of the Open Eyes Economy Summit, Foundation of Economy and Public Administration, in “Fakty po Faktach” on TVN24, former deputy prime minister.

On Friday the Council of Ministers adopted a draft amendment to the budget for 2023. State budget expenditure may increase by about PLN 20.8 billion, said Deputy Finance Minister Sebastian Skuza.

Hausner on the amendment of the state budget and the economy

– It should be emphasized that if they are launched (additional expenses – ed.), it means that it will be an additional inflation impulse, so the question is whether this indicator will be maintained inflationwhich the government now assumes (12 percent – ed.), although this one is realistic. It should also be emphasized that one of the reasons the government has not mentioned at all is that tax revenues are worse than expected, said the former deputy prime minister.

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According to Hausner, “we need to see the revenue and expenditure sides together, bearing in mind that a larger deficit is undoubtedly an additional inflation impulse.”

He added that “if we were to discuss current indicators, we would find some that are very good.” – Undoubtedly, such an indicator is low unemployment ratebut we will also find some that are not so good.” – If we look at what it looks like in the first quarter (…) the dynamics of gross domestic product, we are talking about the prospect of zero growth this year, while for In recent years, the average rate of economic growth in Poland has been four percent, he stressed.

Hausner about price increases

– The prospects for the next two years are also below the pace achieved since 2014. We also see indicators that show us a very strong decline in sales. The fact that there is less demand, especially lower consumer demand, contributes to lowering inflation dynamics, but let us remember that the fact that prices are rising at a slower pace does not mean that they are not rising. They continue to grow very high – noted Hausner.

The former deputy prime minister said that “two factors taken together” are the most alarming for him.

– Constantly high, 13%, i.e. above 10%, inflation. Far from the target of the National Bank of Poland (2.5% +/- 1% – ed.) and from the standards to which our economy is already accustomed. On the other hand, very low dynamics of economic growth. Taken together, these two indicators show us that we have found ourselves in a stagflationary environment. The stagflation scenario that economists have warned against is happening, he said.

In his opinion, “if we are unable to stimulate growth without stimulating inflation”, then “we may be in danger of maintaining low economic growth in the long term, and this is a threat to us because a deep technological and industrial restructuring is now taking place in the world.”

– All countries are participating in this race, in this competition, and they will have to rebuild their economies to make them more productive, less energy-intensive. If we have such stagnant indicators, it means that we will not be able to make this deep transformation, Hausner noted.

Main photo source: TVN24

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