Polish PM says 2021 budget is 'rational compromise'

Leszek Szymański/PAP

The government-proposed 2021 budget bill is a "rational compromise" between Poland's possibilities and aspirations, PM Mateusz Morawiecki said in a Facebook post on Thursday as the parliament continues to debate the bill.

On Wednesday, Poland's Sejm (lower house) held a several-hour debate on the 2021 draft budget law envisaging a EUR 18.3-billion budget deficit.

"The budget that we have proposed is a rational compromise between the possibilities and aspirations of Poland and Poles, one that facilitates their functioning and development in times of economic uncertainty," the prime minister wrote.

The budget focuses on "the safety our families," Morawiecki also said.

Referring to the planned budget deficit next year, Finance Minister Tadeusz Koscinski pointed out that it will be about PLN 27 billion (EUR 6.02 billion) lower than the PLN 109.3-billion (EUR 24.38-billion) deficit planned for this year.

Koscinski told parliament on Wednesday that the general government deficit, calculated according to the EU methodology, is projected at around 6 percent of GDP. Public debt at the end of 2021 is to reach PLN 1.242 trillion (EUR 277 billion), i.e. 52.7 percent of GDP.

Koscinski explained that the increase in debt chiefly results from expenses related to the anti-crisis and financial shields introduced to save enterprises and jobs.

During the debate, the opposition criticised the growing state debt. MPs pointed out that according to the EU methodology, the state debt will reach 64 percent of GDP, which is well above the debt-to-GDP ratio written into the constitution.

Opposition politicians also criticised the bill for insufficient funds allocated to healthcare.

The draft budget for 2021 envisages a PLN 82.3-billion (EUR 18.3 billion) deficit with revenues seen at PLN 404.4 billion (EUR 89.9 billion) and expenditures at PLN 486.7 billion (EUR 108.2 billion).

The draft envisages a 4-percent GDP growth, annual inflation at 1.8 percent, and an increase in private consumption reaching 6.3 percent.