In an interview with Reuters, Jeff Gottlieb, the International Monetary Fund's Regional Representative for Central, Eastern and Southeastern Europe, highlighted Poland's economic successes.
Poland has been one of the world's biggest economic growth success stories over the past 30 years
Gottlieb said.
According to the expert, the country's low public debt, strong economic growth, and the ambitious budget consolidation promised by the government are all factors that contribute to increasing Poland's financial credibility. The Polish government recently announced that it intends to reduce its budget deficit below the limit set by the European Union by 2028 and reduce public debt as a proportion of GDP by 2030.
Gottlieb emphasized that it is worth bringing forward the size of the budget adjustment when growth is strong and inflation is still high.
According to International Monetary Fund forecasts, the largest economy in Central and Eastern Europe will expand by 3.5% next year, while growth of up to 3.9% in 2025 is possible.
However, IMF mission head in Poland, Jan Kees-Martin, warned of challenges to medium-term growth.
We have a strong record of growth. Convergence has occurred, but that means we have a little bit of catching up to do. This will make it difficult to grow at the same rate in the future
Martin said.
Experts say the main pressures on the budget are an aging population, military spending and needed climate investment. According to the IMF proposal, a more targeted distribution of comprehensive social benefits and reform of the tax system could be a solution.
In a report released last week, the International Monetary Fund recommended that Poland raise income, property and value-added taxes to the EU average level. In addition, they recommended aligning the retirement age for men and women and gradually increasing it in proportion to the increase in average lifespan.
Source: Reuters
The cover image is an illustration. Cover image source: Getty Images
