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Poland's 2016 deficit tipped to rise by up to PLN 1.5 billion

PR dla Zagranicy
Nick Hodge 17.11.2015 10:42
Poland's newly sworn in finance minister Paweł Szałamacha has said that the 2016 government budget deficit will rise by up to PLN 1.5 billion (EUR 0.35 billion) as a result of new policies, including a large increase in child benefits.
Finance Minister Paweł Szałamacha (R) with Deputy Prime Minister and Minister of Development Mateusz Morawiecki (L). Photo: PAP/Radek PietruszkaFinance Minister Paweł Szałamacha (R) with Deputy Prime Minister and Minister of Development Mateusz Morawiecki (L). Photo: PAP/Radek Pietruszka

Szałamacha, who was sworn in with fellow cabinet members on Monday, told reporters that funding a plan to give families PLN 500 (EUR 118) per child would be a priority of his ministry.

According to previous estimates the pro-family plan, expected to be implemented in early 2016, could cost the state PLN 22 billion (EUR 5.2 billion) a year.

“We expect that the efficiency of collecting indirect taxes – VAT and excise duty – will improve in the second half of the year, which will allow us to realize this project,” the new minister explained, also pointing to planned tax increases.

However, Szałamacha admitted that increased tax revenue would not be enough to fund the project, and that the deficit would rise next year by an estimated PLN 1-1.5 billion (EUR 0.24-0.35 billion).

The current 2016 budget, adopted by the previous government in September this year, foresees a maximum deficit of PLN 54.6 billion (EUR 12.9 billion), on the assumption of 3.8 percent GDP growth.

An amendment to this budget will be introduced to parliament in December to allow the deficit to rise further. (sl/nh)

Source: PAP

tags: benefits, deficit
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