Financial World

Poland's Finance Minister Jan Rostowski said he expected a record public deficit for 2010 of "up to 52.2 billion zloty (12.7 billion euros) in an interview published on Saturday.

"We expect that the deficit will go up on this year, as high as 52.2 billion zloty," he told the newspaper Rzeczpospolita.

The deficit will rise to 3.8 percent of gross domestic product.

It will be a record, and almost twice this year's deficit, the paper noted.

Rostowski already warned in June that this year's budget deficit had risen from 18.2 billion to 27 billion zloty (from four to 5.9 billion euros), with projected growth of the economy shrinking slightly from 0.5 to 0.2 percent.

He emphasised that the liberal government's privatisation drive would be crucial to ensuring Poland's debts remained less than 55 percent of GDP.

He estimated that privatisations in 2009 and 2010 would bring in 28.5 billion zloty in revenue, a more cautious estimate than Treasury Minister Aleksander Grad, who in July predicted income of 36.7 billion zloty.

"One of the main reasons for the rise in public deficit is the expenditure connected to road construction, which we simply cannot do without," the minister said.

For 2008-2012 Poland has set aside 121 billion zloty (27.5 billion euros), of which nearly a third is coming from EU funds, to modernise its road infrastructure before the Euro 2012 football championships, which it won the right to host jointly with Ukraine.

Poland is the only country in the European Union to have retained economic growth this year, with its economy due to mark an expansion of 1.0 percent of GDP.