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Government approves 2011 budget


2010-09-29

The government on 28 September approved a draft 2011 budget with a central budget deficit of PLN 40.2bn (approx. €10.1bn), down from PLN 52.2bn (€13.1bn) officially projected for this year. The reduction of the deficit is to be achieved through a combination of higher tax receipts, helped by faster GDP growth and a one percentage point rise in VAT (among other tax-raising measures), and a reining-in of expenditures by means of a new spending cap tied to inflation.

The 2011 budget is premised on GDP growth of 3.5%, up from 3% forecast for this year. Inflation is projected to amount to 2.3% next year, and the unemployment rate is to fall to 9.9% by the end of 2011.

In the event that public debt rises above 55% of GDP during next year, which the Ministry of Finance considers unlikely, contingency measures will be instituted, most notably a further rise in VAT and the scrapping of certain income tax breaks.



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