Poland eyes more transparency in face of rising debt

Poland is taking significant steps to enhance the transparency of its public finances, according to Finance Minister Andrzej Domanski, as reported by Reuters on Monday.

Amid escalating debt servicing costs, the country is implementing measures to rein in out-of-budget spending and establish an independent fiscal council to evaluate government policy.

Domanski expressed his intent to urge the government towards maximum transparency through measures including a review of public finances, set to be published by the ministry on Monday.

Poland is among nearly a dozen European Union (EU) countries at risk of being subjected to the bloc’s excessive deficit procedure, imposed on those whose deficit limits exceed 3 per cent of GDP.

Warsaw’s deficit is projected to rise to 5.4 per cent by year-end, according to a Reuters poll. The country is also spending more than 4 per cent of its economic output on defence as Russia continues its assault on neighbouring Ukraine.

Domanski’s goal is to repair public finances following several years of high off-budget spending by the previous Law and Justice (PiS) government since the COVID-19 pandemic.

Starting April 30, the state-owned development bank BGK will begin publishing data on all of its funds in terms of execution and current plans on a quarterly basis.

In addition, Poland’s annual long-term financial plan, to be adopted by the government on Tuesday, will include the framework for establishing a fiscal council to monitor government policy, including macroeconomic projections and the budget bill.

Domanski further emphasised that the council must be an independent institution and that all its publications must be made public.

Domanski noted that Poland’s debt servicing costs were among the highest in the EU and said he was looking at its smaller neighbour, the Czech Republic, as a guide.

He also expressed his interest in attracting more private investments, in addition to higher consumption, as a driver of economic growth. “Private investments are very important to me, which is why we are talking to investors in Poland and abroad,” he said.