![]() ![]() As a result, Polish companies seeking for funds to grow are forced to pay more which limits the opportunity to grow. Those who decide to invest in Poland expect higher interest as a compensation for the risk. ![]() Moreover, high level of public debt causes Poland to be perceived as a more risky country. As a result, we are able to pass less capital for future generations. Meanwhile, poor condition of public finance, visible by the permanent deficit and high level of debt, contribute to the situation when savings of households are spent on huge governmental financing needs. If we want to achieve the standard of living of the rich countries of Western Europe, we need to keep GDP growth high. This is particularly important, because, despite the successes of last 25 years, Poland is still the sixth poorest country In European Union. Secondly, unsound public finances and resulting public debt constitute drag on economic growth. Nevertheless, the lower the public debt ceteris paribus, the safer the country is. These issues were highlighted by a crisis in the euro zone – before 2008 investors didn’t hesitate to lend money to Greece, Spain, Slovenia or Hungary then they revised their evaluation, and these countries deepened in crisis. This value varies, depending on the situation in the economy and in financial market sentiment. It cannot be pointed where exactly the threshold for safe public debt lies. Such crisis means a GDP slump, rise in unemployment and lower wages for those who keep their jobs. However, we should be aware that what is happening with public debt has a strong impact on our economy and thus, on our standard of living.įirst of all, the bigger the debt, the greater the risk of the public finance crisis. Why should we be intrested in public debt?įor most of us, public debt, reaching almost trillion of Polish zloty and still rising, is an abstract amount. ![]()
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