The Polish government plans to reduce the budget deficit from 5.7% this year to 3% by 2028 to align with EU rules, according to the country’s finance minister.
Poland and six other high-spending EU member countries are obliged to submit proposals for reducing their plans to reduce their large budget deficits to within the 3% of GDP recommended by Brussels by mid-October.
The Polish response to the EU’s excessive debt procedure (EDP) requirements was set out in the "medium-term budget and structural plan for 2025-2028" unveiled by the government on Tuesday and made available on the Ministry of Finance’s website.
“We have taken advantage of the opportunity to reduce the deficit in uneven parcels,” Finance Minister Andrzej Domański told journalists.
“This means that next year the primary structural deficit is expected to be reduced by 0.25 percent of GDP, and in the following years the adjustment effort will have to be correspondingly greater,” the minister said.
From 2026 to 2028, the deficit will be reduced by about 1% of GDP per year,reaching 2.9% by the end of 2028.
The Polish response to the EU’s excessive debt procedure (EDP) requirements was set out in the "medium-term budget and structural plan for 2025-2028" unveiled by the government on Tuesday and made available on the Ministry of Finance’s website.
“We have taken advantage of the opportunity to reduce the deficit in uneven parcels,” Finance Minister Andrzej Domański told journalists.
“This means that next year the primary structural deficit is expected to be reduced by 0.25 percent of GDP, and in the following years the adjustment effort will have to be correspondingly greater,” the minister said.
From 2026 to 2028, the deficit will be reduced by about 1% of GDP per year,reaching 2.9% by the end of 2028.
No cuts, says Minister
Without giving details of how the government will reduce the deficit, the finance minister quelled press speculation of possible cuts to child benefit or raising the pension age.
“Our goal is to avoid cuts which are too painful. We don’t plan any cuts in benefits,” said Domański, adding that there will be “no increase in the retirement age.”
The Finance Ministry said that without an increase in investment in defense spending of 0.25% of GDP, then it would have been possible to reduce the nominal deficit by 0.5%.
Poland is to spend the equivalent of 4.2% of GDP on arms in 2024, well in excess of NATO’s recommended rate of 2% of GDP. The most recent draft budget sees total defense spending rising to 4.7% of GDP in 2025, with total spending reaching 186.6 billion złoty (€ 43.7 bn).
Given the increase in defense spending, the overall ratio of public debt to GDP is to increase to above 60% in 2026 and 2027, according to budget plans laid out by the government for the EU.
Domański said that while formal approval of the debt reduction plan by the European Commission may take a couple of months, it has been informally approved by the EU Commissioner for Economic and Financial Affairs Paolo Gentiloni.
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