During the 6th SGH conference devoted to the development prospects of local governments, which took place at the PAP Press Center, experts analyzed the results of the Local Government Development Activity Index (WARS). Rural communes, which feel the effects of depopulation the most, have the poorest assessment of their future.
The rest of the text below the video
Read also: India's GDP. The promotion to fourth place in the world is close
— The demographic trend is so strong that it cannot be reversed and will have an impact on finances – Dudek emphasized.
Consolidation of municipalities is inevitable
The topic of uniting units returns more and more often. Previously, prof. Jerzy Hausner pointed out that Poland cannot afford to maintain nearly 2.5 thousand people. municipalities with growing demographic problems. Dudek shares this opinion, arguing that small communes may not cope financially with a decreasing number of inhabitants and high administrative costs.
The expert also drew attention to systemic income problems, including a decline in PIT revenues. Although the central budget partially compensates for the losses, this creates tensions in the entire public finance sector.
Read also: The fate of TVN hangs in the balance. Donald Tusk can do this
Snowball effect
In a broader perspective, the threat is the growing public debt. As Dudek pointed out, data from the International Monetary Fund show that Poland entered the phase of the so-called snowball effect – the deficit fuels an increase in debt, which may reach 70-80 percent. GDP despite the forecast economic growth.
The growing fiscal risk will also affect local governments. According to the head of the Fiscal Council, Regional Chambers of Audit alone may not be enough to maintain financial discipline. Strengthening institutional control, greater transparency and more active social control are needed.
Although the economic situation remains stable in the short term, demographic and debt challenges may materialize within a few years. Therefore – as Dudek emphasizes – local governments should now look for new, autonomous sources of income and prepare for inevitable structural changes.
