State budget revenues totalled up to PLN 250.3 billion and were slightly higher than those forecast, while state budget expenditures were lower than the budget target and stood at PLN 294.9 billion. As a result, the PLN 44.6 billion budget deficit was recorded, which was lower than the planned PLN 52.2 billion.
Higher budget revenues can be attributed to better economic conditions, mainly the economic growth, which was faster than predicted, and a slight improvement in the labour market situation. All these factors contributed to a relatively stable Polish zloty. What is more, the state received an unexpected payment under profits from the National Bank of Poland (NBP) and benefited from the introduction of a higher excise duty rate on tobacco products.
While analysing the state budget execution, it must be remembered that the statistics do not reflect the overall picture of the imbalance of public finances. There is certain spending that adds to the public debt which is excluded from the budget deficit. Furthermore, some budget expenditures, such as expenditures on road infrastructure, are transferred to entities whose liabilities do not add to the national debt.
In 2010, the public debt grew dangerously to the level of PLN 747.9 billion. The public debt to GDP ratio amounted to 52.8 percent and has become closer to the 55-percent level at which drastic austerity measures must be imposed. High debt burden led to an increase in the country’s borrowing costs.
