WARSAW: Poland’s fiscal deficit shrank last year to its lowest since comparable data begun to be collected in 1995, data showed on Tuesday, helped by robust economic growth, measures to tackle tax evasion and record low unemployment.
The improvement, which took place despite a significant increase in social spending under the right-wing government compared with 2015, could result in upgrades to Poland’s credit ratings, analysts said.
The fiscal deficit fell to 1.5 percent of gross domestic product in 2017 from a revised 2.3 percent in 2016, preliminary data from the statistics office showed, based on a European Union methodology.
“The fiscal result of the general government sector is the best on record,” state-run bank PKO BP said, citing the government’s fight against tax evasion and local governments balancing budgets.
“The very good fiscal data … bode well for the assessment of macroeconomic fundamentals of the Polish economy by rating agencies, given that the data are perceived as a sustained improvement,” PKO BP added.
Economists from private bank BZ WBK took a similar view, noting: “A lowering of public debt could become a significant argument for an improvement in the credit rating, if this tendency is deemed as lasting and not stemming from cyclical factors”.
