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Government approves draft 2012 budget


The government on 5 May approved the draft 2012 budget bill, months earlier than usual. It is poised to be enacted by the Sejm before 1 July, when Poland is due to assume the EU’s six-month rotating presidency, and will not feature on the agenda during the parliamentary elections scheduled for the autumn.

Prime Minister Donald Tusk said the key objective of the 2012 budget was to rein in spending, and that the document was “tough” but “safe for the people”. It proposes a budget deficit of PLN 35bn (approx. €8.9bn), down from PLN 40.2bn (€10.2bn) projected for this year, helped by a continued wage freeze in most of the public sector (except teachers), a new spending rule that caps increases in discretionary spending at 1% in real terms, and robust GDP growth of 4%, which is to significantly boost tax receipts. Average annual inflation is projected to be 2.8% in 2012, and wages are forecast to rise by 2.9% in real terms. The unemployment rate is to fall to 10% by the end of next year and employment in the national economy is to rise by 1.3%.

In the opinion of many commentators, the 2012 budget is not ambitious enough in tackling structural spending issues.

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