Poland aiming for 1.6% deficit by 2016

(WARSAW) - Polish Finance Minister Jacek Rostowski said Tuesday that Warsaw expects its public deficit to fall to 1.6 percent of output in 2016, from 3.9 percent last year, which would bring Poland well below the EU limit.

Rostowski spoke to reporters after the government approved a 2013-2016 budget plan required by the EU, in which Warsaw also repeated its plan to lower the deficit to 3.5 percent this year, within striking distance of the 3.0 percent ceiling.

Under terms of the EU's Maastricht Treaty, countries are supposed to run public deficits of no more than 3.0 percent of gross domestic product (GDP), and to work towards a balance or even a surplus in times of economic growth.

To bring the deficit below 3.0 percent, Warsaw is banking on stronger growth than the 2012 level of 1.9 percent, and the forecast level of 1.5 percent this year.

The government expects its economy -- Central Europe's largest -- to expand by 2.5 percent in 2014, 3.8 percent in 2015 and 4.3 percent in 2016.

Poland is the only EU member to have maintained steady growth since the global financial crisis first struck in 2007 and through the eurozone crisis, thanks in part to a fall in the value of the zloty against the euro, which helped Polish exporters.

Poland is obliged to adopt the euro under the terms of its 2004 entry into the European Union, but there is no deadline and Rostowski said earlier this month that it might take up to a dozen years for the country to be ready.

At the moment, only Poland's public debt meets the Maastricht criteria for adopting the euro, which at around 55 percent of GDP is comfortably below the limit of 60 percent.