Not such a low debt

On paper, Poland’s debt-to-GDP ratio is the lowest in nearly two decades, standing at just 48.1 percent. GDP, but this result is a strong falsification of the real state of affairs.

If you believe that the media uncritically spreads the message that comes directly from the ruling camp, such promising data on the national debt is primarily due to the sealing of the tax system. In addition, there is much talk of an increase in economic activity, which would translate into an increase in VAT and VAT revenues. Only lastly is it mentioned that inflation in Poland has been raging for more than two years, reaching a double-digit result exactly in March last year and unfortunately still not letting go.

Disappearing artificial barrier

Three years ago, when Tadeusz Kościński was head of the Ministry of Finance, there was talk of a desire to abandon the constitutional debt limit. “It is an artificial barrier,” argued the Polish finance manager, and in the spring of 2022, Prime Minister Mateusz Morawiecki argued in the Sejm that it was necessary to break free from the spending cap rule. In his defense, it must be admitted that he spoke of this in the context of the need to spend on armaments, but it is known that for a long time in government circles the removal of budget constraints was also considered in the face of other concerns. types of expenditure (e.g. social or for the green transformation).

Within three years, however, the situation has changed like a kaleidoscope, and today, instead of creating a media base for constitutional amendments, we are dealing with pointing out the great success of the government in the form of a significant debt reduction. . It is emphasized in many different ways that the Polish public debt has fallen enormously and is presented as one of the lowest in Europe, even according to the EU methodology (i.e. also taking into account the debts of local government units and government institutions). . One might even get the impression that the fall in the value of debt relative to GDP is only 48.1 percent. at the end of the first quarter, even the rulers themselves surprised, who, embarrassed by this, began to argue that this was the result of a deliberate and planned action related, among other things, to the already mentioned tightening of the tax system.

Source: Do Rzeczy