18:14 1 April 2026
Polish deficit greater than during pandemic
Poland has entered a fiscal shock with a public finance deficit exceeding pandemic levels despite solid economic growth. In 2025, the deficit reached 7.2% of GDP and public debt rose to 59.7%, nearing the critical 60% threshold.
Unlike during COVID-19, the deficit is not driven by crisis support but by rising spending and weaker-than-expected tax revenues. Public spending grew to about 50% of GDP, driven by defense and healthcare costs, while VAT and income tax revenues underperformed.
The situation risks a debt spiral, with rising borrowing costs further increasing deficits. Rating agencies have already downgraded Poland’s outlook to negative. Prospects for improvement are limited due to economic uncertainty, high oil prices, and political resistance to tax increases ahead of elections.
(pb.pl)
