Limited manoeuvre in Poland's fiscal policy

Poland's social-conservative opposition party Law & Justice (PiS) won general elections. The shift in economic policy is expected after parliamentary election. However, any "radical" decision of the PiS is unlikely. The new government has limited room to immediately increase expenditure and the budget deficit. 

The previous government's 2016 budget bill was based on optimistic macroeconomic assumptions. In general, the new government should be quite cautious. They plan to keep general government deficit close to 3% (this year was around 2.8% of GDP). 

"The new government will start from implementation of the new taxes. It will be a tax either on banking assets (0.39%, revenues of PLN5.0bn) or on all financial transactions (0.14%, revenues of PLN1.7bn), and a 2% retail sales tax on large retailers with over 250sqm of floor space (PLN3.4-3.5bn in annual budget receipts)", says Societe Generale. 

They will also introduce measures to increase net receipts mainly by improving tax collection and preventing money transfers to tax havens.