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UPDATE 1-Polish deficit may drop to 3 pct in 2010-official

Published 05/11/2009, 01:46 AM
Updated 05/11/2009, 02:00 AM

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WARSAW, May 11 (Reuters) - Poland's general government deficit may drop to 3 percent of GDP in 2010 after a rise to 4.6 percent in 2009, Deputy Finance Minister Ludwik Kotecki was quoted as saying on Monday.

Poland has to limit its deficit to below 3 percent of GDP in order to meet the criteria necessary to carry out the government's ambitious plan to adopt Europe's single currency in 2012.

"It is possible to reduce the general government deficit to 3 percent in 2010 from 4.6 percent in 2009, but it is too early to say how the adjustment will look. We don't know what the budget revenues nor growth would be," Kotecki told Gazeta Prawna daily.

The general government deficit, a broader measure of deficit that includes deficits of local governments and national health fund, is expected to spike to 4.6 percent in 2009 due to slowing economy.

After the European Union's largest ex-communist member's deficit rose to 3.9 percent in 2008 Poland does not meet most of the criteria to be accepted into the euro-zone.

"We do not meet most of the criteria because of financial markets' instability and the global crisis. We do not have to meet the criteria at the moment," Kotecki added.

In order to be accepted into the zone Poland has to meet all the criteria in 2011, when the European Commission will evaluate its economic situation. (Reporting by Patryk Wasilewski)

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