- If entrepreneurs can’t “boost” GDP, Poland may face penalties. The SME sector could potentially benefit from a generous budget, but there’s also the risk of new taxes.
- The plan for 2025 calls for an increase in spending on health and defense, with sectors such as transportation and energy also set to gain. Here, investment growth of 25 percent is planned.
- The new budget also represents an opportunity for the construction industry. The government intends to allocate about 4.3 billion złoty to housing. The energy transition will also generate business.
The draft budget law for 2025, presented by the government, has been dubbed as generous. Experts and economists assume that the planned increase in spending will stimulate investment and may contribute to the development of many businesses. However, the forecast deficit for the coming year will be even larger, and in June this year our country was subjected to an excessive deficit procedure by the European Commission. This means that we will have to present our plan to reduce it to Brussels in the coming years. If we don’t fulfill these provisions, the EC may impose heavy penalties on Warsaw.
“A dynamic economic growth of our country, which the government assumes in its multi-year plans, can help in this situation. A significant part of the burden of financing spending will fall on the SME sector, and even single-person economic districts. There are over 2.6 million such companies in Poland. The current budget plan is therefore, on the one hand, a good signal sent to active entrepreneurs who would also like to benefit from this development and contribute to it. On the other hand, a large deficit may raise fears of increasing tax and paratax burdens. Someone has to finance the investments, and the government will be determined to increase revenues,” says Kamil Fac, Managing Vice President of Faktura.pl.
Where to Look for Chances?
In its 2025 budget project, the government has assumed an increase in spending on defense and health. These sectors are dominated by State Treasury Companies, so the room for maneuver for private businesses is smaller. However, one can also take a look at other branches where an increase in spending has been announced, like transportation or energy, for example.
For transportation and communication, the project of the budget law for 2025 foresees 24.9 billion złoty, which is 5.7 billion more than in this year’s budget. A similar increase can be expected in the energy sector, where at least 4.6 billion złoty has been planned for the construction of the first nuclear power plant in Poland. There is also considerable growth in spending planned for the so-called energy transition.
“From this slice of the pie, companies from the SME sector will want to also get something for themselves, even indirectly. The conversion of companies to energy-saving mode and reducing their carbon footprint is becoming a necessity today and can be made easier thanks to investments. However, formal requirements may increase, such as those related to the settlement of co-financing programs, so the SME sector will need accounting support,” says Kamil Fac from Faktura.pl.
Great Opportunity for the Construction Industry
Reading the draft budget law, it can be assumed that it will also be a huge opportunity for businesses in the broadly understood construction sector. The government will allocate over 4.3 billion złoty for housing alone, which is 50 percent more than this year. As market observers assess, the construction sector will be one of the most rapidly developing branches of Polish industry next year. As in the sectors mentioned above, the main stimuli supporting the growth of the market in the coming years will be the solid long-term macroeconomic foundations of the Polish economy.
Although as experts remind us, the beginning of 2024 brought declines in production both in the construction of cubic volumes and in engineering, from next year infrastructure investment should accelerate again, which, with the expected reduction in interest rates, will improve results in both of these sectors.
“Good growth prospects are an encouraging signal for entrepreneurs who want to grow and invest. In the next year’s budget, the SME sector can find a variety of opportunities for themselves. However, companies must also be ready for potential pitfalls. Certainly, maintaining high financial liquidity and securing support in relations with large contractors will allow entrepreneurs to react flexibly to possible economic changes,” concludes Jerzy Dąbrowski, president of Finea, a microfactoring company.
According to the project’s assumptions, the budget revenues will amount to 632.6 billion złoty, and planned expenses may exceed 921.6 billion złoty. This means that the budget deficit will be at least 289 billion złoty. This will be a record deficit in the history of Poland and will be more than 100 billion złoty larger than last year’s, which until now led in this infamous statistic. The budget is generous, but such a large deficit can be risky.
Source: https://managerplus.pl/projekt-przyszlorocznego-budzetu-cala-nadzieja-w-przedsiebiorcach-89116
