4:51 18 May 2026
Oil shock strains Polish budget
Poland's state budget deficit reached approximately PLN 90 billion in the first four months of 2026, according to Finance Ministry estimates circulating in mid-May, as energy cost pressures and high defence commitments collided with steady social expenditure. The Middle East conflict — specifically the ongoing US-Israel operations against Iran and partial blockage of the Strait of Hormuz — pushed Brent crude oil to over $109 per barrel, with Polish fuel prices at the pump rising nearly 60% year-on-year in April despite temporary government price-subsidy support under the CPN programme. The government extended the CPN mechanism through the end of May. Separately, economists from PKO BP lowered their 2026 GDP growth forecast to 3.5% from 3.7%, citing reduced consumer confidence amid the oil shock, though Poland's economy retains one of the strongest growth outlooks in the EU.
