Finance Minister Jacek Rostowski.
The Sejm is expected to finish its deliberations on budget 2012 this Thursday, with the lower house voting on the final version Friday morning, before it goes to the senate.
The budget envisages a deficit of no more than 35 million zlotys in 2012, with spending at no more than 328.7 billion zlotys and revenues 293.7 billion zlotys.
The Sejm's public finance committee has adopted 15 amendments to the draft legislation, all supported by the finance ministry.
It proposes wage freezes among employees in the state budget sphere and indexation of pensions from March 2012.
The government assumes growth of 2.5 percent, inflation of 2.8 percent and unemployment at year-end of 12.3 percent.
The Sejm debate on the second reading of budget 2012 is expected to close at 16.30 CET today.
Slawomir Neumann, deputy chief of the Sejm commission on public finances, said the body had been working on reducing spending by over 130 million zlotys with proposed cuts in the President’s Chamber, the Senate, the High Court, Citizens’ Rights Committee and the Institute of National Remembrance (IPN).
PO MP Krystyna Skowronska during the budget debate noted international institutions’ strong evaluations of the Polish economy. She also pointed to the strengthening zloty and relatively low yields on public debt.
The World Bank (WB) said last week that Poland’s growth may slip to 2.5 percent in 2012, although was relatively upbeat on the country's prospects.
The central bank, NBP, said in a report published this week that the slowdown in Poland’s economy would be relatively small, with GDP above 2.5 percent in 2012
Finance Minister Jacek Rostowski has reiterated that the government is on course to meet it budget targets for this year.
However, fears are that slowing growth could hit tax revenues while rising prices sustain strong wage growth demands, also in the public sector.
A central budget deficit of 35 billion zlotys is widely seen as possible, although a 3 percent of debt to the public sector deficit - given the need to rein in spending and the likely impact this could have on growth – is less certain.
The government needs to avoid breaching a debt threshold of 55 percent of GDP, which would automatically trigger stringent budget cuts.(jh)