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Budget System in Poland: Challenges and Ongoing Reforms

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  • Bartłomiej Wiczewski

Abstract

In recent years, amid solid economic growth and measures to increase tax collection, Poland significantly reduced its fiscal deficit and public debt. Simultaneously, the country implemented several policies that are likely to weigh on public finances in the future. In the medium and long term, Poland will face challenges resulting from the Covid-19 pandemic and high expenditure related to population ageing, switching its growth engine to more knowledge-based activities and tackling climate challenges. Given recent increases in tax collection, procyclicality of tax revenue and the recession caused by the pandemic, achieving further collection gains does not appear plausible. Thus, an efficient management of public expenditure is expected to be crucial for fiscal policy. The budget system plays a major role in this. The current budget system in Poland has not undergone a major reform for years. Its current setup may not always be conducive to an effective management and control of funds. Longer-term planning is not sufficient and value-adding tools, like spending reviews, are not an inherent part of the process. Also, external, independent oversight is not optimal. The authorities, recognising the scale of these issues, are reforming the budget system. They benefit from a technical support financed by the EU under the Structural Reform Support Programme. As the reform will involve nearly all general government units and entail a significant change of working methods, it needs to be spread over several years.

Suggested Citation

  • Bartłomiej Wiczewski, 2020. "Budget System in Poland: Challenges and Ongoing Reforms," European Economy - Economic Briefs 060, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    • Handle: RePEc:euf:ecobri:060
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    budget system; budget; reform; spending reviews; performance budgeting; public finances; budget system in Poland: challenges and ongoing reforms; Wiczewski.;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H61 - Public Economics - - National Budget, Deficit, and Debt - - - Budget; Budget Systems
    • H68 - Public Economics - - National Budget, Deficit, and Debt - - - Forecasts of Budgets, Deficits, and Debt

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