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Friday, June 21, 2024

GDP, inflation, unemployment. Budget assumptions for 2024

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On Tuesday, the Council of Ministers adopted macroeconomic assumptions for the draft budget act for 2024. The government predicts that there will be an economic recovery next year, with GDP growth expected to reach 3 percent. Inflation is expected to be 6.6 percent.

The communiqué of the Chancellery of the Prime Minister indicated that the macroeconomic assumptions for the draft state budget for 2024 are consistent with the Update of the Convergence Program sent to the European Commission, however, taking into account the impact of the “800 plus” program on the economy. “In 2024, the economic policy of the government will be aimed at strengthening the potential of the Polish economy after the energy crisis caused by Russian aggression in Ukrainewhile maintaining the stability of public debt and taking into account the guidelines of EU institutions.

The government predicts that in 2024 there will be an economic recovery, and GDP growth should reach 3%. This will be influenced by falling inflation, a return to positive dynamics of real wages in annual terms and an improvement in consumer sentiment. According to the assumptions, private consumption in 2023 will increase by 0.7% in real terms, and in 2024, along with the improvement of the economic situation, its dynamics will reach the level of 2.8%. It was predicted that the real increase in gross outlays on fixed assets in 2023 it will amount to 1.1 percent, and in 2024 investments should increase by 4.4 percent. “The growing dynamics of investments will be influenced by the improvement of the economic situation, and in the long run also by the falling cost of capital expected by the market” – noted in the communiqué. “In the coming years, a significant increase in public investment is also expected, including an increase in the country’s defense capabilities” – added. The government assumes that in 2023 the real growth rate of exports will amount to 1.7 percent, in 2024, along with the improvement of the economic situation on export markets, this increase will amount to 3.9 percent. In turn, real imports in 2023 will decrease by 0.3%, mainly as a result of a decrease in domestic demand. In 2024, imports will grow at a rate similar to exports (3.8%). As a result, the contribution net exports to GDP growth will be 1.2 percentage points in 2023 and 0.2 percentage points in 2024.” – marked. As a result, as added, the current account balance in relation to GDP will change from -3.0 percent. GDP in 2022 to -1.0 percent GDP this year and -0.5 percent GDP in 2024. The budget assumptions also assume that the average employment in the national economy in 2023 will be 0.5% higher than in the previous year, and in 2024 it will increase by 1.1%. The moderate employment dynamics will be affected by the limited labor supply, which is the result of demographic processes, it was explained. “In 2023, a slight increase is expected unemployment rates up to 5.5 percent at the end of the year and its decline at the end of 2024 to 5.3 percent. It is forecast that the increase in the average wage in the national economy will be 11.9 percent in 2023 and 9.7 percent in 2024. The government expects inflation to average 12 percent this year and 12 percent next year. 6.6% in 2009. “The main factors that will contribute to lowering inflation will be the stabilization of energy and food prices in the world markets, the relatively low dynamics of private consumption this year and the restrictive monetary policy” – it was noted.

In accordance with the budget procedure presented on the website of the Ministry of Finance, the assumptions of the next year’s budget and the preliminary forecast of selected macroeconomic indicators are to be presented by the government to the Social Dialogue Council in June. In July, the procedure assumes setting the amounts of spending limits for individual parts of the budget for the year (n+1). In August, the Ministry of Finance is to develop and submit a preliminary draft budget to the Council of Ministers, and then submit it to the Social Dialogue Council for an opinion.

the Council of Ministers has until September 30. for the adoption of the final draft of the budget act for 2024 and its submission with justification to the Sejm. According to the Constitution, the government must send the draft budget to the Sejm at least three months before the beginning of the budget year. The Senate may adopt amendments to the Budget Act within 20 days of its submission to the upper house. President of the Republic of Poland signs the budget act presented by the Marshal of the Sejm within seven days. However, if within four months from the date of submission of the draft budget act to the Sejm, the budget is not presented to the President of the Republic of Poland for signature, then the head of state may order the shortening of the term of office of the Sejm within 14 days.

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