EC warns Poland may not meet 3% deficit limit for several years.

By bne IntelliNews November 14, 2011
Poland's headline general government deficit is expected to fall to 5.6% of GDP, driven by a significant increase in the revenue ratio (from 37.5% of GDP in 2010 to 39.6% of GDP in 2011) and a slight decline in the expenditure ratio (from 45.4% of GDP in 2010 to 45.2% of GDP in 2011), according to the European Commission's autumn forecasts. The deficit is expected to decline to 4.0% of GDP, owing in part to a limited increase in the revenue ratio (from 39.6% of GDP to 40.8% of GDP), slower than in 2011 because of a stagnating labour market and diminishing responsiveness of tax revenues to the changes in tax base, the Commission continued. The headline deficit is expected to keep decreasing in 2013, reaching 3.1% of GDP, on the back of rebounding economic growth and persistently low public investment expenditure, alongside a slowdown in inflows of structural funds. In its official documents, the Polish government, though, has not yet abandoned the plan to fulfil the EC's requirement of ending its excessive deficit procedure in 2012. The EC now announced that by mid-December, new arguments proving the means of cutting the deficit are in the pipeline should be presented.
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