Three trillion zlotys. We will cross historical borders

“It is almost certainly so Gross domestic product Poland in the whole of 2022 will exceed PLN 3 trillionthat is, 3,000,000,000,000 Polish zlotys, ”we read on the website ofbanker.pl. However, we will have to wait a few months for these estimates to be confirmed by the Central Statistical Office.

This will happen on the one hand thanks to economic growth, on the other hand – Due to high inflation, which leads to a depreciation of the Polish zloty in real terms.

In such circumstances, as Pekao analysts note, Paradoxically, there is a decrease in debt relative to GDP, despite significant spending.

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“The decrease in public debt is a paradox, because at the same time the state has launched a number of costly new spending projects” – say Picao analysts, listing costly government projects PIS From last time:

• “Polish System” 1.0 and 2.0, which reduced public revenues by PLN 20 billion annually.
• Coal and other energy additions to homes (cost PLN 20 billion in 2022).
• Anti-inflationary shield (eg 0% VAT on food) – cost PLN 31 billion in 2022 and about PLN 17 billion in 2023.
• Gas price freeze in 2022 for households and small and medium-sized businesses (cost: at least PLN 10 billion) and its continuation in 2023.

The explanation for this discrepancy is, first, this In recent quarters we have seen high real GDP growth and high inflation, which translates into a rapid increase in fiscal tax bases. This is clearly evidenced by the dynamics of value-added tax revenues, which, despite anti-inflationary shields, are growing rapidly.

However, as they point out, However, high inflation is not a reason for joy. Experts point out that “extremely high inflation is fiscally unfavorable when the value of money declines significantly between the moment the tax is imposed and collected.”