Poland's economic growth will accelerate to 3.3% in 2014 and further to 3.8% in 2015 from last year's 1.6%, according to the draft of the 2014 update to Poland's EU convergence programme, seen by the Polish Press Agency. The documents stipulates for GDP growth of 4.3% in both 2016 and 2017.
Under the draft, HICP inflation in Poland should accelerate to 1.2% in 2014 from 0.9% in 2013; it is expected to reach 2.3% in 2015, 2.5% in 2016 and 2.2% in 2017.
The ministry has also assumed that according to ESA 95 methodology, Poland will report a general government surplus of 5.8% of GDP in 2014 and will return to deficit - of 2.5% of GDP in 2015. In 2016-2017, the gap is expected at 1.8% of GDP and 1.2% of GDP, respectively.
The agency also learnt unofficially from government sources that according to the new ESA 2010 methodology, the 2014 deficit would be 3.5% of GDP and the 2015 gap - 2.7% of GDP. The new methodology is due to take effect in September of 2014.
In February, the European Commission estimated that in 2013, the deficit increased to 4.4% of GDP from 3.9% of GDP in 2012, mainly due to a weak performance of indirect and direct tax revenues.
At that time, the Commission said that Poland's general government budget balance is projected to turn into a surplus of 5.0% of GDP in 2014 under ESA95, while it is set to post a deficit of 3.8% if the assets transferred to the state coffers - estimated at 8.5% of GDP - from privately-owned open pension funds (OFEs) are not treated as revenue.
In 2015, due to the one-off nature of the large improvement in 2014, the general government budget balance is expected to return into the red, posting a deficit of 2.9% of GDP under ESA95. Excluding regular asset transfers linked to the reversal of the pension reform, the deficit is projected to reach 3.5% of GDP in 2015, the report also reads.
EC stresses that under the current accounting rules (ESA95), such asset transfers are treated as general government revenue. Under the new rules that will come into force this autumn (ESA2010), such transfers will not count as revenue anymore.
Recently, minister of finance Mateusz Szczurek upheld the plan to lower the deficit to below 3.0% of GDP in 2015. Last year, the European authorities extended Poland's deadline to bring the deficit back below the EU reference level of 3.0% of GDP by one year - until 2015.
The Polish Press Agency also reported that the Polish government plans to tackle the draft on Apr 29 so that it could be submitted with the European Commission by the end of the month.
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