Polish Government Sets Out Draft 2027 Budget with Deficit Remaining at 7.1% of GDP
The draft sets healthcare at 274.1 billion zloty and defence at 198.1 billion zloty as borrowing needs rise to 565 billion zloty.
- On Friday, the Polish cabinet approved the 2027 draft budget, authorizing 977.6 billion zloty in total expenditure. Prime Minister Donald Tusk stated the plan reflects Poland's financial responsibilities amid regional conflicts.
- Poland faces fiscal pressure as the 2027 deficit is forecast at 7.1% of GDP, exceeding EU limits. Public debt surpassed 60% of GDP for the first time, keeping the country under the European Union's excessive deficit procedure since 2024.
- Spending priorities include 198.1 billion zloty for defence, equivalent to 4.5% of GDP, and 274.1 billion zloty for healthcare. Finance Minister Andrzej Domański reported debt-servicing costs will rise to 107 billion zloty due to refinancing bonds issued in 2020 and 2021.
- Political gridlock between the government and President Karol Nawrocki complicates fiscal management efforts. Rating agencies Fitch and Moody shifted Poland's credit outlook to negative, citing concerns over "large fiscal deficits and rapidly rising debt."
- The government projects 3% GDP growth for 2027, though analysts at ING Bank Śląski criticized the budget as expansionary with no deficit reduction progress. Tusk's ruling coalition faces pivotal parliamentary elections next year against right-wing opposition.
11 Articles
11 Articles
Poland anticipates maintaining the general government deficit at 7.1% of GDP in 2027, on the basis of unprecedented deliveries of military technology and a strong increase in defence spending.
Record revenues, but also a huge deficit. The government has adopted the draft state budget for next year. Donald Tusk's cabinet is prioritizing defense, healthcare, and investments, but it also faces growing debt and increasingly high debt servicing costs.
Poland expects the government budget deficit to remain unchanged, at 7.1% of GDP in 2027, the same level now foreseen for the current year, fuelled by record deliveries of equipment...
The Council of Ministers has adopted the draft budget for 2027. Total defense spending is expected to reach PLN 198.1 billion, or 4.51% of GDP. This is slightly less than planned for 2026. At the same time, the government is announcing record-breaking military equipment deliveries for the Polish Armed Forces. "But the hardest part may come after 2030, when SAFE funds run out, more professional soldiers will serve, and fiscal flexibility will be …
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