As gross domestic product (GDP) shrank in the fourth quarter of 2023, the country could follow regional peers Hungary and the Czech Republic into a technical recession if GDP contracts again in the current quarter. In an interview with state-run news agency PAP published on Monday, finance Minister Magdalena Rzeczkowska said that market forcasts of around 1% GDP growth in Poland in 2023 were realistic. The 2023 budget forecasts growth of 1.7%. Morawiecki said the general government deficit for 2022, which also includes spending by local authorities, was around 3% of gross domestic product. According to the 2023 budget the deficit should increase to 68 billion zlotys, with a general government deficit of 4.5% of GDP. The budget pencilled in a debt to GDP ratio of 53.3%. However, Morawiecki said that in 2023 debt to GDP would be 49-50%. Poland's ruling nationalists Law and Justice (PiS) have faced criticism for shifting some spending off-budget, a practice the International Monetary Fund and credit rating agencies say weakens oversight. PiS have rejected the criticism, saying that raising money for the state's response to the COVID-19 pandemic and to strengthen the military through bonds issued by the state fund and development bank allowed it to respond quickly. It argues that all spending increases are funded by improved tax collection. Morawiecki said that to counter such criticism the government would prepare an act that would show the consolidation of public finances. "In order to streamline the financial system and emphasise that we really have nothing to hide, we will prepare an act that will show the consolidation of public finances in subsequent settlement periods," he said. ($1 = 4.4242 zlotys) (Reporting by Alan Charlish and Pawel Florkiewicz; Editing by Susan Fenton)
(Adds finance minister comment on 2023 GDP growth)
WARSAW, March 6 (Reuters) - Poland's budget deficit for
2022 was much lower than expected at 12.4 billion zlotys ($2.8
billion), the prime minister said on Monday, as emerging
Europe's largest economy has so far avoided recession after
being hit by the war in Ukraine.
"Our budget deficit was supposed to amount to about 30
billion zlotys (in 2022)," Mateusz Morawiecki told a news
conference, referring to the government's 2022 budget forecast.
"However, I can say today that the deficit for 2022 is 12.4
billion zlotys, which is much better than economists predicted."
Poland, however, has been rocked by the war unfolding to its
east and the soaring inflation it has unleashed.
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