Poland has managed well during the times of global economic crisis, maintaining the economic growth rate. However, the national debt still increases; the government has therefore decided to take up some remedy measures to put down the deficit. It committed itself to eliminating the excessive deficit by 2012.
National debt
In 2009, national debt accounted for 49.9 percent of GDP. According to the preliminary estimates of the Ministry of Finance, at the end of 2010 it amounted to 53.5 percent of GDP. Despite the increase, Poland performs well compared to other EU countries. In 2009, the debt of Germany was 73.2 percent of GDP, in France 77.6 percent of GDP and 115.8 percent of GDP in Italy. The UE average was 73.6 percent of GDP.
Budget savings
Since the beginning of the government’s term, budget savings were more than PLN 20 billion. In this way, Poland has managed not to fall into the debt trap and can benefit from the improving economic conditions to reduce the national debt. Billions of savings were possible to obtain by, inter alia, lowering the operating costs of public administration and the introduction of bridging pension reform. Yet another reform is being prepared, this time the one concerning the uniformed services pension plan. The consultations on this issue with the representatives of trade unions are under way.
Spending rule
As of 2011, the government introduces a so-called spending rule. Under this rule, all state budget spendings can accrue annually by 1 percentage point maximum over the inflation value.
Changes in the national pension system
Out of PLN 700 billion of Polish debt, up to PLN 200 billion is generated by financing the Open Pension Funds (OFEs) with the debt. Therefore, the government decided to introduce changes in the open pension funds’ functioning. In 2012 - 2013, the premium rate transferred to open pension funds will decrease from 7.3 percent to 2.3 percent. The remaining 5 percent will be forwarded to specially created individual sub-accounts in the Social Insurance Institution (ZUS). These funds will be indexed based on the average rate of economic growth. It will also be possible, as in the case of capital in open pension funds, to inherit the funds accrued. In subsequent years, the premium transferred to OFEs will increase gradually to reach 3.5 percent in 2017. In addition, persons who wish to allocate extra funds to the so-called Individual Pension Security Accounts (IKZE), from 2012 will be allowed to benefit from a special tax allowance of 4 percent deferred from taxation basis for natural persons’ income tax.