...Good Operating Performance: Fitch Ratings believes that for 2016-2017 the operating balance for the sector may stabilise at PLN22bn, accounting for 11%-12% of operating revenue, which will be close to the expected results in 2015 (about PLN21bn or 11.8%) and higher than the 9.8% average for 2010-2014. Growing Tax Revenue: Good operating performance will be supported by continued economic growth in Poland ¡ 3.5% real GDP growth in 2015-2017, which will translate into a 7% annual increase in income taxes, in line with the increase in 2015. Income taxes account for about 24% of aggregate local and regional governments' (LRGs) operating revenue. Curbed Operating Spending: We expect that LRGs will continue their efficiency measures aimed at limiting operating expenditure growth, but that the measures will bring diminishing savings over time. In addition, they may be partly consumed by the growing maintenance costs of the newly built infrastructure. As a result, we expect that LRGs' operating...
