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Poland's parliament approves 2013 budget as slowdown looms

polish flag copyWARSAW: Poland's parliament approved the 2013 central budget in a tight vote on Wednesday, although some analysts say it is based on overly optimistic economic growth assumptions and may need to be revised next year.


The budget is based on forecasts for economic growth of 2.2 percent next year, a central deficit of 35.5 billion zlotys ($11.3 billion) - only slightly more than in 2012, revenues of 299.4 billion zlotys and annual average inflation of 2.7 percent.


The central budget deficit is a narrower measure than the general government deficit, which also includes state agencies and local governments.


Deputies voted 233 to 221 to pass the budget, and decided to stick to all the key assumptions that the government initially proposed in September despite growing concern the bill did not reflect the quick pace of the economy's deterioration.


Analyst polled by Reuters expect the economy to slow to 1.7 percent from 2.2 percent in 2012.


"I think the budget is responsible and will provide safety in 2013 and development in the coming years," Finance Minister Jacek Rostowski told reporters in parliament before the vote.


"If it turns out that it needs to be amended then we will present such an amendment during the year, which would not be any catastrophe."


Growth in central Europe's largest economy eased to a much slower than expected 1.4 percent year-on-year in the third quarter, prompting the government to acknowledge that growth will undershoot the 2.5 percent forecast the 2012 budget is based on.


Poland has already relaxed its general government deficit target for this year, saying it will be around 3.5 percent of GDP instead of 2.9 percent as planned earlier.


Center>Copyright Reuters, 2012


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