Privatization could be key

12th March 2010

Poland’s budget outlook for 2010 looks grim based on the year’s first months, but the billions in income expected from privatization this year and an accelerating economy both give reason to believe that optimistic forecasts for this year’s deficit may be grounded in reality.

The Polish budget deficit in Q1 2010 is on target to reach a record level of PLN 16-20 bln, according to economists surveyed by the daily Rzeczpospolita. That equals some 30-38 percent of the government’s projection for a PLN 52.2 revenue shortfall for the entire year.

Largely to blame for the poor numbers was a consumer spending slowdown that led to declines in VAT revenues - a major source of income for ...