In the European Union, there is a procedure known as excessive deficit, which sets an invariable level of 3% GDP. The current government- after adding further social expenditures or attempting to fulfill election promises- will have to face the fact that the budget deficit will be around 5.1%. This level threatens to be unrealistic, assuming that the projected revenues from VAT, corporate income tax, and personal income tax will be achieved, which will be very difficult. Even before the election results were announced, the Leviathan Confederation suggested that the 2024 budget may be impossible to implement. Therefore, it can be expected that a more serious amendment to the budget will need to be made mid-year.
“In Poland, we have a budget problem. The current government inherited the budget law from the previous government. As soon as this law or the draft budget law for 2024 came to light last year, the Leviathan Confederation strongly indicated that it was too optimistic,” Mariusz Zielonka, the economic expert of the Leviathan Confederation, told eNewsroom.pl. “This mainly concerns the fact that the previous government assumed unrealistic revenues on the budget side – both from VAT, personal income tax and corporate income tax. These three categories will have a very negative impact on the deficit and public debt. As such, the current government did not have much choice or the ability to work on this budget. While we can live with the debt, because every country lives with quite a high debt, when it comes to the budget – the deficit is approaching dangerous limits, which the Union and the European Commission may not accept,” warns Zielonka.
