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Never before has the government debt increased so much. The Ministry of Finance provided new data

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Record increase in debt: The debt of the State Treasury in December 2024 amounted to PLN 1,628.6 billion – results from preliminary data estimates. The domestic debt amounted to PLN 1,253.0 billion, and the foreign debt – PLN 375.6 billion (23.1% of the entire State Treasury debt). This an increase of PLN 60.1 billion compared to Novemberi.e. by 3.8 percent. Compared to the end of 2023, the debt increased by PLN 282 billion PLN, i.e. by almost 21%. This is the largest increase in history both in nominal and percentage terms.

This is why the Treasury debt increased: December's data are only preliminary. Full debt data refer to November. At that time, the debt of the State Treasury reached PLN 1,568 billion, the monthly debt increase amounted to 2.1%. (+PLN 31.5 billion). Ministry of Finance explains that the increase in debt resulted mainly from the need to cover the budget deficit. From January to November, the hole in the state treasury amounted to PLN 141.8 billion. However, at the end of the year the hole may be bigger. In the amended budget act, the deficit limit was increased from PLN 184 to 240 billion. This effect of increased public spending (800 instead 500 plusor military spending) and weaker than forecast budget revenues.

Watch the video Bonds, or how we stopped being afraid and fell in love with public debt

About who buys bonds: Countries refinance debt by selling treasury bonds. In 2024 domestic banks were most willing to buy Polish bonds. At the end of November, they had securities worth PLN 605 billion in their portfolio. This is PLN 95 billion more than at the end of 2023. The State Treasury sold an additional PLN 71 billion of bonds to foreign investors (PLN 485 billion in total). The non-banking sector invested an additional PLN 56 billion (PLN 478 billion in total) in Treasury Bonds. Households are responsible for a large part of this amount (PLN 31 billion), in whose hands there is already a total of PLN 143 billion in bonds.

Is growing debt a problem? The debt of the State Treasury is usually around 90%. state public debt. The rest are liabilities of other public finance sector units. In 2026, public debt, according to government assumptions, will exceed 60%. GDP, exceeding the constitutional debt limit. However, this limit is criticized by many economists. – The constitutional limit should be abolished – it has no economic justification. Poland was the first in the world to introduce it. This is a remnant of our forcefully proving how suitable we are for the European Union and how seriously we treat the arbitrary rules adopted in the Maastricht Treaty and resulting from the outdated economics of the early 1990s. There is no reason to believe that debt of 80 or 90 percent has worse consequences for the economy than those at the level of 50 or 60 percent. Many Western countries significantly exceed this 60 percent. – he said in an interview with Next.Gazeta.pl Maciej Szlinder.

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Read also: “Debt map. Here's who is most indebted in the EU. What about Poland?”

Sources: : Ministry of Finance, State debt – Monthly Bulletin 11/2024, RepublicBudget lexicon, Gazeta.pl



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