Fitch: Polish governments facing debt

Fitch Ratings said that Polish local governments continue to face inefficient debt management, with increasingly rigid expenditure and inadequate funding.

In a new report, Fitch said the ongoing decentralization is resulting in frequent changes to the local governments' responsibilities, and in turn affecting their budgets as financial resources allocated to new responsibilities are often found to be insufficient.

The governments' operating expenditure is becoming more rigid, due to the increasing proportion of personnel costs in their budgets, the agency said.

This is partly due to state government decisions to increase teachers' salaries every year without adequate financing, Fitch added.

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