Since the global financial crisis began and economic growth slowed worldwide, Polish fiscal policy has appeared to be one step ahead of events, at a time when most governments could only react to what had already happened. The rationalisation and reduction of personal income tax rates passed in 2008, to create just two rates of 18% and 32%, helped stimulate domestic demand just as Poland's key export markets in the EU and Russia were slowing.
And while the International Monetary Fund (IMF) was advising countries to pursue fiscal stimulus in early 2009, Polish finance minister Jacek Rostowski was already proposing measures to bring down a budget deficit, swollen by lower tax collection and rising social spending pressures, the natural consequences of slower growth. The aim was to cut 17bn zloty ($6bn) from the budget for 2009, partly by delaying some long-term infrastructure investments.
