Does the government have a budget problem?

Instead of expanding investment and improving public finances, we will be faced with a revision of the budget. It can already be seen that the first plan has no chance of being implemented, due to the fact that it was besides optimistic. Due to the presidential elections, the rulers abstained from many unpopular cuts in the budget, but in this way they prepared themselves a road for future troubles.

The data presented by the Ministry of Finance on the implementation of the budget for the first 7 months of this year may be of concern.

The Minister of Finance, and late besides the Minister of Economy, Andrzej Domański, utilized to celebrate all data showing economical growth, slowing down inflation or falling unemployment on social media. Thus, erstwhile GDP growth in the second 4th could be boasted by 3.2% a fewer days ago, he did so immediately, as with affirmative data on the affirmative trade balance.

After the announcement of the implementation of the budget, however, the manager of Polish finance and economy took on the mouth, without even feeling obliged to calm the public against disappointing results. erstwhile data from the erstwhile 4th was reported, Domanski praised that VAT and CIT revenues were expanding at a double-digit rate. However, this time it turns out that spending increases more dynamically.

Surprising anomaly

Between January and July 2025, the gross of the state budget amounted to PLN 313.8 billion and was lower by about PLN 42.7 billion compared to the same period of the erstwhile year (by a percent of up to 12%). Implementation of the gross amounted to 49.6% of the full amount planned for this year. During the same period, expenditure amounted to PLN 470.5 billion, i.e. 51.1% of the yearly plan.

Such data would not rise any major concerns if the first half of the year were mentioned. Taking into account the long-term data, usually after July the implementation of revenues oscillated around 58-59 percent, i.e. the proportional elapse of time from the full year. Only in 2023 the revenues after July amounted to 52%, which was an anomaly, and was connected with the evidence budget deficit of the Polish state.

At present, after 7 months, the budget deficit is almost PLN 157 billion, and according to the budget law it is expected to scope an absolutely evidence amount of PLN 290 billion. However, the implementation of the budget so far gives emergence to concerns that it will yet be
Even higher.

The Ministry of Finance explains the current situation of changes in the financing of local governments. The “smiled Poland” camp paid the self-governments supporting it in return for the support provided in the form of a larger amount of funds from PIT and CIT. According to the Ministry, the gross from both taxes actually increased by respective percent.

Gifts for theirs cost

However, the payment of political remuneration to the self-governments, known for spending and paying highly advanced salaries, was not without consequence due to the fact that the central budget was under additional pressure. According to the calculations of the Ministry Andrzej Domański without this gift, the Polish state would have at the minute revenues higher by about PLN 36 billion. So was it reasonable to make specified changes in the year erstwhile the deficit reached the highest value in the past to date and Poland was subjected to the EU excessive deficit procedure?

The government has, of course, 5 long months to improve the budget situation. Often, it is not until the second part of the year to balance the balance. There will inactive be time for possible harsh criticism, but there is no way to go over the fact that the government is on a dangerous path. If the current dynamics of gross and expenditure were to continue, the deficit at the end of the year would scope as much as PLN 400 billion. This is improbable to happen, but there can besides be serious doubts about whether it will definitely increase over the planned PLN 290 billion.

The budget deficit in Poland, as in many another countries, is affecting itself that it grows importantly in December. This is due to the fact that peculiar uniform services, bonuses for public administration, but besides 13th retirement are being implemented. Since accession to the European Union, payments with the Community have besides been regulated in the last period and, in addition, economical activity is considerably lower than at another times of the year. In erstwhile years, up to 40% of the full deficit occurred in December.

So unless a miracle happens, Donald Tusk's government is working hard to shock Poles about the worrying state of public finances just before the end of this year. The deficit value recorded after July would be bearable if it were given in November, but in the mediate of the vacation it may be rather worrying. Especially since last year the government failed to prevent the deficit from widening with each month.

Waste that costs

The issue of the state of Polish public finances would surely have been to justice differently if the scandal related to the embezzlement of funds from the National Reconstruction Plan had not emerged. After its outburst, the government assured that it would carefully control all related expenditure and that the controversy afraid only 1 industry. However, there are many indications that we are dealing with only the tip of the iceberg, and a akin pattern of public spending besides existed in another areas.

Yacht purchases surely enjoyed the party's act, but waste practiced on specified a large scale cannot go without an echo for the full economy. On the way to the election, the current ruling squad promised to increase the level of investment, while their level is inactive failing. The government has stopped many improvement investments, including the construction of CPK rail spokes, the expansion of ports or the functioning of investigation institutions. At the level of facilitations for entrepreneurs, only an empty PR was satisfied, which companyed its individual Rafał Brzoska. The Polish state spends evidence sums and indebted to evidence amounts, but a large part of this money is wasted on consumption and unnecessary social expenditure.

Instead of expanding investment and improving public finances, we will gotta revise the budget. It can already be seen that the first plan has no chance of being implemented, due to the fact that it was besides optimistic. Due to the presidential elections, the rulers abstained from many unpopular cuts in the budget, but in this way they prepared themselves a road for future troubles. If after the vacation it turns out that the deficit will be even greater, voters will not accept it, to be fair, with satisfaction.

A very worrying signal is besides the level of VAT gross which remained almost at the same ceiling as the year before. Signals that the mafia extorting the returns of this taxation are doing large again, have been coming for a long time, but this time it seems not only to be a rumor, but a return to practices from 2007-2015..