Poland: Fiscal mess blots the outlook

We estimate that limits on public debt set out in the Polish constitution will force the government to tighten fiscal policy by around 2.5% of GDP next year. What’s more, a further fiscal tightening of about 1% of GDP will be required in 2011-12 if the government is to meet its euro-entry ambitions. Accordingly, while Poland has so far weathered the global recession comparatively well, GDP growth is unlikely to top 2.5% in the next couple of years.