A gift to Donald Tusk’s government. Borrowing will be much cheaper

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In December, yields fell by 0.53 percentage points. To show the scale of this phenomenon, if the interest rate on the entire state treasury debt fell by this much, the savings could amount to PLN 7 billion per year on interest payments. In 2024 alone, the government must borrow over PLN 420 billion (and perhaps more after new spending plans), saving 0.53 percentage points. The benefits will result in savings of PLN 2.2 billion in annual expenses. Since September, the yield on Polish 10-year bonds has fallen by as much as 0.93 percentage points.

The previous increase in interest rates led to a wave of inflation and higher interest rates this year until October The cost of debt servicing amounted to PLN 45 billion, or 8.8%. state expenditures, While a year ago in the same period it was 24 billion Polish zlotys and 6%. Expenses. In the current year Already 9.5 percent of taxes paid by Poles was used to pay off debts.

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Interestingly, the recent decline in our bond yields is still ongoing, and the new government has just announced an increase in the already huge budget deficit. The offering will amount to PLN 180 billion, not PLN 165 billion as in the law prepared during the PiS government, which means it will be PLN 15 billion larger. The new costs introduced by the new government are expected to reach PLN 40-45 billion, so, like his predecessors, it seems that many expenses will be shifted outside the budget, although Minister Domanski talks about looking for savings, among other things. In the form of unfreezing energy prices starting mid-year. If this is the case, why are returns falling? Is the assessment of Donald Tusk’s government that good even before he begins governing in earnest?