Kotecki, Dudek and Kalisz: Poland needs a less expansive fiscal policy

The reduction of the expansiveness of fiscal policy in Poland would allow the transfer of the national Policy Mix in a direction more similar to the optimal and it is difficult to see the benefits of delaying such adaptation – assess the authors of the cyclical report “threat to excessive public debt”.

According to the authors of the report – Piotr Kalisz, Sławomir Dudek and Ludwik Kotecki – a restrictive monetary policy and too mild fiscal policy in Poland are conducive to maintaining low -level investment rates and at the same time lead to the increase in debt service costs.

“As if to look at the numbers, it is clearly seen that the fiscal policy is extremely loose. (…) If we have a 6 % GDP and above deficit, and GDP growth in the area of ​​3 percent or even this year nearly 4, it can be seen that the deficit is clearly higher about 3 pp. In relation to the long -term average. At the same time, the monetary policy seems restrictive PB

“Real data from the Polish economy seem to confirm this diagnosis. Investment outlays in the Polish economy in 2024 constituted 17.4 percent of GDP and it was the fourth lowest percentage in the European Union (…). At the same time, the public debt remained on the growth path, and the debt service in relation to GDP gradually increased” – wrote in the report published on Monday.

According to the report, in a longer horizon, maintaining this situation would have a negative impact on the rate of capital accumulation in Poland, and thus also on the growth potential of the Polish economy.

“In turn, the rising costs of servicing debts could become a factor limiting the field of fiscal policy maneuver, hindering the conduct of anti -cyclic and stabilization policy. In total, this would mean increasing the vulnerability of the economy to external shocks and a reduction in a long -term growth trend” – wrote.

“Considering all of the above threats, a reduction in the expansiveness of fiscal policy seems to be in the current conditions, which would allow you to properly shift the national Policy Mix in a direction more similar to the optimal. At the same time, taking into account the deficit scale and debt trajectory, it is difficult to see macroeconomic benefits resulting from a possible delay in such adaptation” – added. (PAP Biznes)

Tus/ Ana/