Can financial markets put pressure on a powerful country like France, the world’s eighth-largest economy? It is better not to test it. The UK has found that out several times. An analysis by Institut Montaigne found that promises made before the election by the leftist New Popular Front would increase France’s annual budget spending by €95 billion and the state finance deficit by 3.6 percent of GDP.
The current process of negotiating salary increases for public servants should also be seen in the context of international comparisons. Slovakia spends the most on salaries in the whole V4, not only as a share of total public administration expenditure but also as a share of GDP. In these comparisons, Slovakia spends more than the EU average.
Earlier this month, it became clear that the World Bank has classified Bulgaria as a high-income country. This news is an important reflection of the long-term growth trajectory and catching-up process of the developed countries, particularly those in the European Union. Still, it is far from meaning that Bulgaria already has a guaranteed spot in the rich countries club and does not have any difficult problems to solve.
The International Monetary Fund’s mission carried out an assessment in Warsaw on 14-24 March under Art. IV of the of the IMF Articles of Agreement. The mission pointed to the most important problems of the Polish economy and presented related recommendations. The Fund’s delegation pointed out that the most important challenge is to bring inflation down to the target (which upper band of deviations is 3.5%). Therefore, it becomes necessary to tighten fiscal policy this year.
Mateusz Morawiecki, during the recent press conference “Stable public finances in unstable times”, bragged that under the rule of PiS’ government “the [public] debt in relation to GDP will fall” and it will be the case “despite gigantic expenses during the pandemic, despite huge expenses on the anti-inflation shield.” He stressed that “there are no catches here, there are no special operations.”
At least once a year Eurostat confirms through fresh data that Bulgaria is the poorest nation in the EU. More specifically, we are talking about comparisons of GDP per capita according to purchasing power parity.
The EU Commission’s (EC) spring forecast, demonstrating the expected real growth for 2022 and 2023 was published exactly a day before the preliminary data for growth in the first quarter of 2022.
The year 2021 brought to light what is otherwise invisible and unappreciated in normal times. Business people were unexpectedly commended for the growth of GDP. But what was the actual cost of growing it?
The “Polish Order”, presented by the ruling Law and Justice party, is a marketing shell without comprehensive reforms and adequate and effective actions. It is not a plan for increasing prosperity. It is a plan for spending money and buying votes in those areas where the authorities have their electorate and can still gain some points.
Some respected economists identified the issue of consolidation in public budget already in 2022 as a third-order problem. From an analytical point of view, he is, of course, right. A one-year deficit of 10% of GDP is nothing compared to a permanent two to five per cent deficit in the pension system with a declining workforce.
