In the prepared analysis, Prof. Piotr Krajewski points to a set of opportunities and threats resulting from the draft budget act for 2024.
In my opinion, the Budget Act for 2024 is an optimal compromise between striving for the stability of public finances and the long-term development of Poland through increased budget expenditure, primarily on education and science. On the one hand, the assumed budget deficit is not high enough to threaten the stability of public finances. Despite the high state budget deficit, the deficit of the entire public finance sector (calculated according to the EU methodology) will be reduced in 2024 from 5.6% of GDP to 5.1% of GDP. On the other hand, the undoubted advantage of the budget act for 2024 is the fact that it provides funds not only to finance the costly social benefits declared in the election campaign, but also plans to increase those expenses that are key to the long-term development of Poland – i.e. expenditure on education and science. This is even more important taking into the account the fact that the level of financing for education and science in recent years has been extremely low
– he writes in the introduction.
The main opportunities related to the adoption of the budget act listed by Prof. Krajewski include:
- Influencing the improvement of the long-term level of education and science by increasing the salaries of teachers and academics by 30%.
- Influencing the improvement of the quality of public services by increasing the remuneration of state budget employees by 20%.
- Increasing the actual level of capital expenditure despite the tight budget situation.
- Stimulating the economy through increased budget spending in a period of relatively low GDP level.
In turn, the largest threats resulting from the adoption of the budget act according to Prof. Krajewski include:
- Forecast of a significant increase in VAT revenues, based on the uncertain assumption of a significant improvement in collection rates.
- Potential increase in debt servicing costs if interest rates increase.
- No detailed information on the situation of public finances at the time of preparation of the final version of the draft budget act
The entire expert opinion is available on the website of the Senate of the Republic of Poland. (in Polish)
Source: Development Centre of the Faculty of Economics and Sociology, University of Lodz
Photo: Maciej Andrzejewski, (Communications and PR Centre, University of Lodz)