POLAND – Poland will see “substantially” higher pension payments in 2006 follow a change in the pension indexation system, a new report states.
The report, from the International Monetary Fund, noted that the 2005 budget sees a start of an improvement in public finances, with the general government deficit projected to be five percent of GDP, down from the seven percent expected for 2004.
It said: “The implied withdrawal of fiscal stimulus—about one percent of GDP—is appropriate at this stage of the cycle, although it only partially corrects the pro-cyclical increase in the structural deficit this year.
“Moreover, about one-third of the adjustment stems from a change in the pension indexation system, which will entail substantially higher pension payments in 2006.”
The IMF added that it was important that measures that need parliamentary approval, such as changes to the farmers' pension scheme, known as KRUS, be implemented. And it said that Poland’s health care system “needs redesigning to cope with population ageing”.
Last week finance minister Miroslaw Gronicki said the 2005 budget was “realistic” according to a news service run on behalf of the government. "We have the budget that ensures sensible functioning of the state next year. There will be no problems with putting it into practice," Gronicki said.
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