Monday, 16 May 2011

Local Governments Invest More and Have Lower Debt

As noted elswhere on this blog the Polish central government s pressuring local governments to decrease their debt. This is part of the government's general attempt to bring down its defict to below 3% by 2012. The Finance Minister has produced a plan that states that local goernments will not be able to have a deficit as a percentage of its income above 4% in 2013, 3% in 2014 and 1 % in 2015.

This has come under heavy criticism from local governments and others who recognise that local governments have most successfully managed to gain EU funds and invest in infrastructural projects in recent years. Representatives of local governments have rightly argued that it is their investments that have managed to keep the Polish economy growing throughout the global economic crisis and help it avoid falling into recession.

Today's Gazeta Wyborcza has published some interesting statistics that show how local government's have not only been investing the most but also how their level of debt is miniscule in relation to that of central govenrment:

Public Money (bn złoty):

Central Government: 300

Local Government: 170

Investment Expenditure (bn złoty):

Central Government: 15

Local Government: 40

Public Investment (%)

Central Government: 5
Local Government: 23.5

Share of Public Debt (%)

Central Government: 94.2
Local Government: 4.8

Debt in Relation to Income (%)

Central Government: 227
Local Government: 26

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