WARSAW: Poland plans to cut its fiscal deficit to 2.5 percent of economic output in 2015, from a previously forecast 2.6-2.7 percent, due to an improvement in the economy and spending discipline, a government document obtained by Reuters showed.
Poland, the largest economy in central and eastern Europe, is currently under the European Union's excessive deficit procedure - a tool to enforce fiscal discipline - and has been given until 2015 to cut its fiscal deficit below 3 percent of gross domestic product.
"Poland plans in 2015 to reach a deficit at 2.5 percent of GDP, which will allow for ending of the excessive deficit procedure," according to the document, which the finance ministry has sent to the European Commission and the Council of the European Union.
It also shows that Poland plans to cut its 2014 deficit to 3.3 percent.
Poland had said previously that it planned to cut the deficit to 2.6-2.7 percent of GDP in 2015 from 3.4 percent this year.
The document also shows that the new targets for 2014 and 2015 are lower than the 3.9 and 2.8 percent recommended by the Council of the EU.
The country had planned to exit the deficit procedure in 2014, but an economic slowdown forced it to revise last year's budget and it asked the Commission for more time.
Poland's deficit peaked at nearly 8 percent of GDP in 2010.
The finance ministry said the main reason for the lower targets was the implementation of a rule that constrains spending which was used to plan 2015 expenditure.
"The fiscal consolidation is also supported by an improving economic situation, which is reflected in the accelerating pace of growth in domestic demand, investments and GDP," the document said.
The finance ministry expects the economy to expand by 3.3 percent this year and 3.4 percent in 2015.
The document said the new deficit targets take into account all additional policies announced by Prime Minister Ewa Kopacz at the beginning of October.
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