Communication 5/2017: FOR forecasts confirmed: 1 trillion on Public Debt Counter
- On 28 February 2017, the Ministry of Finance announced that State Treasury debt at the end of 2016 amounted to PLN 929 billion. This information could be misleading to the public as the Treasury debt is only part of public sector debt, and while full data has not yet been published, forecasts indicate that public sector debt at the end of 2016 exceeded PLN 1 trillion.
- Treasury debt, which is the largest category of public debt (about 89% of the total), rose in nominal terms at a record-breaking pace, by PLN 94 billion (5.1% of GDP) in 2016. This is more than during the crisis year of 2010, when the debt of the Treasury grew by PLN 70 billion (4.9% of GDP). However this is not a record growth if measured by percentage points of GDP.
- The level of State Treasury debt, published at the end of 2016, provisionally indicates that debt of the public finance sector exceeded one trillion at the end of the year. This is more than predicted by the cautious forecasts of FOR, our counter of public debt reached one trillion only on 10 January 2017.
On 28 February 2017 the Ministry of Finance issued a communiqué on the amount of Treasury debt at the end of 2016, giving the figure of PLN 929 billion. This information could be misleading to the public, because Treasury debt is only part of public sector debt. Full data has not been published yet, but forecasts indicate that public sector debt at the end of 2016 exceeded PLN 1 trillion. It would mean that it reached thirteen figures earlier than 10 January 2017, as the FOR Debt Counter (see: www.dlugpubliczny.org) cautiously forecasted (see: FOR Communication 1/2017).
Debt of the public finance sector according to the domestic definition, so-called National Public Debt, consists of three parts: debt of government, of local governments and of social security. The published amount of debt referred only to the Treasury part, not the total debt of the government sector (cf. Table 1). As yet there are no data on the level of debt in other categories at the end of 2016. Once data has been published, it will be necessary to consolidate them, i.e. to exclude flows between different sectors of the state, for example the situation in which a local government is indebted to the national government. Finally, it will be necessary to add categories that are excluded from the national definition of public debt (politicians have deliberately underestimated the value of debt for years), especially the National Road Fund (at the end of September it was indebted at PLN 36 billion). Only then will we receive a reliable amount of General Government debt at the end of the year, as used by Eurostat and the European Commission.
Full communication (by FOR) aviliable here (Polish).
You are welcome to contact our expert:
Rafał Trzeciakowski, Economist at FOR
rafal.trzeciakowski@for.org.pl
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