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Ruling Coalition Starts Budget Marathon

POLAND

The new government is working against the clock to compile an amended budget bill, push it through the legislature and submit to the Presidential Palace by the end of January, as a failure to do so would open up the option for President Andrzej Duda to dissolve parliament. Alternatively, the new coalition could pass the budget draft prepared by the previous administration and try to amend it in parliament later, but any such amendments could be vetoed by the President. Drafting the entire fiscal plan afresh would allow the coalition to avoid this risk, as the budget bill is immune from the presidential veto.

  • Donald Tusk's Cabinet is expected to discuss and approve the revised budget on Tuesday, before parliament debates it in first reading on Thursday. Finance Minister Andrzej Domanski said that the deficit will be "different" than in the spending plan left by the previous administration.
  • Santander wrote that Domanski's comments come as no surprise, given that the measures implemented by the previous government in its final weeks and the plans of the new government amount to around PLN40bn of additional spending. They expect general government deficit to be above 5% of GDP rather than 4.5% in the initial plan.
  • RMF FM ran a source report noting that the revised 2024 budget may assume a fiscal deficit to the tune of PLN200bn versus PLN164bn pencilled in by the previous government, with the coalition determined to implement its campaign pledges, which include salary hikes for public sector workers and maintaining a 0% VAT rate on food.

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