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FOR Communication 19/2017: Publication of data by the Ministry of Finance lacks transparency

  • A sound assessment of the state of public finances requires regular access to the current data. While the government declares that public finances are in excellent shape, the data on budget implementation are published irregularly and with an increasing delay;  the data on VAT returns are being manipulated. This makes it difficult to assess the situation of the state budget, accounting for half of public expenditure in Poland.
  • On 30 October (when this communication is published), estimates of state budget performance have not been so far released by the Ministry of Finance. This is the longest delay ever since the Ministry of Finance started to publish this report.
  • The assessment of public finances is also disturbed by the scale of VAT returns transferred between December and January. Accelerated returns in December 2016 reduced VAT revenues by about PLN 6 billion, while creating an impression of a record growth in early 2017.
  • The deteriorating state of public finances is masked by the current favorable economic climate, which helps to temporary increase the revenues. The economy grows cyclically and naturally, so a slowdown in the future is unavoidable, and it will cause a decline in the revenues’ dynamics. If expenditures are permanently higher (the 500+ Family Program, reduced retirement age), the budget deficit will increase.

The assessment of the state of public finances requires access to the current data, but this has deteriorated after the change of the government.

Since the PiS government came to power, the publication of the data on the budget implementation estimates has been markedly delayed. During the PO-PSL government in 2010-2015, monthly figures of estimated budget execution (excluding December) were regularly published in mid-month. Under PiS’ rule, this good practice has not been continued as the publication of data has been erratic and occurred with a substantial delay. On the other hand, delays in publications of the full-year data (that is figures for December) were already increasing every year under the government of PO-PSL coalition. While PiS government published the data for 2015 with a comparable delay,  the data for 2016 was published notably later.

Full text in Polish you will find here. You can also download it from below.

* We thank Jan Papież and Hubert Furman for their help in collecting data.

Contact with the author:

Aleksander Łaszek, chief economist at FOR
e-mail: aleksander.laszek@for.org.pl