Poland´s Deficit Target in Danger
The Polish government may fail the 3.0% deficit target in 2012. Above all, the economic slowdown is a risk factor.
According to the Polish Prime Minister Donald Tusk, the Polish government may miss the 3.0% budget deficit target this year. Tusk refers to the slower economic growth and the reduced VAT inflow. “Then it could be difficult to meet this target.” Tusk said. However, he underlined to pursue this target. As a result, growth-stimulating measures will not be taken, he explained. Tusk emphasized that the Polish government aims for reaching a balance between budget consolidation and economic growth.
After a meeting with Germany´s Minsiter of Economics Philip Rösler, Poland´s Minister of Finance Jacek Rostowki underlined the “necessity” of rescuing the euro. Rostowski said that not only the Eurozone, but the EU would be endangered. Even the global economy would suffer from a collapse, he alleged.
As a result, Poland will keep the Zloty for the time being. After the Eurozone has managed the current crisis, an accession is conceivable, Foreign Minister Radoslaw Sikorski recently stated. In the end, the introduction of the euro would be in the interest of Poland, Sikorski says. „We will decide on the accession after the Eurozone has conquered the crisis.“ Initially, Poland planned to join the Eurozone in 2014. Due to the current economic difficulties, the accession should take place in 2016 by earliest. At the moment, only 13% of the Poles are in favor of introducing the euro.
Last year, Poland´s economic growth reached 4.3%. However, the budget deficit reached 5.1%. This year, the budget deficit is expected to come at 2.5%, Tusk reaffirmed. In 2013, the deficit should be reduced to 2.2% of GDP.
At the end of 2011, Poland´s national debt level reached 56.3% of the GDP. In 2012, the Polish economy is expected to grow by 2.5% to 3.0%. A weak point of Poland is the chronically high unemployment rate. Last year, the unemployment quota came at 12.4%. Besides that, Poland recorded a current account deficit beyond 4.0% in the last years.