Public debt, augmented by the expected payments related to guarantees, will fall bellow 51% of GDP in 2004 from last year’s 51.6%, but will likely rebound to above 53% in 2005, deems finance minister Miroslaw Gronicki.
He stressed that the 2005 forecast is based on current currency exchange rates. Gronicki also reiterated that the Polish government will use the EU statistical methodology ESA-95 for, among others, calculating its public debt, which will allow for keeping the ratio below 50%. In November, the minister said that calculated in this way, the debt-to-GDP ratio would reach 45.9% this year vs. 45.4% reported for 2003.
Concerning future prospects, FinMin said that government’s borrowing needs in Q1/2005 will likely be lower than in the same period a year ago. Under the 2005 budget, the annual borrowing needs are set at PLN46.49bn. The ministry wants to focus on longer-maturity papers, preferably 5, 10 and 20-year Treasury bonds, Gronicki added.
Furthermore, Poland plans to issue EUR1.5bn in Eurobonds in January. FinMin said that the ministry would strive to offer bonds denominated in EUR, USD, yen and CHF next year, but more details would be available at the turn of January, after holding the government’s meeting with the Monetary Policy Council (RPP) devoted to Poland’s path to
the euro zone. In 2004, the ministry placed EUR700mn worth of Eurobonds as well as notes denominated in CHF and yen. On a different note, the finance minister said that the 2004 budget deficit will likely be closer to PLN40.0bn than PLN45.3bn written into the 2004 budget law.
He upheld his estimates that this year’s deficit will be cut at least by PLN3bn against the annual target. Gronicki also reiterated that after November, the gap will be lower than 75% of the annual plan. After October, the deficit amounted to PLN30.76bn, which means it was 67.9% of the annual plan, as compared with 63.9% after September.