Poland plans record defence spending of 4.8% GDP in 2026 budget along with lower deficit

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Notes from Poland is run by a small editorial team and is published by an independent, non-profit foundation that is funded through donations from our readers. We cannot do what we do without your support.

Poland’s government has approved a draft budget for next year that will raise defence spending to 4.8% of GDP, the highest level in NATO. The plans also include increased healthcare spending but a lower budget deficit.

The budget – which must still be consulted with business and trade union representatives and approved by parliament – sets total expenditure at 918.9 (€215 billion) billion zloty, broadly unchanged from 2025, while revenues are projected to rise 44 billion zloty to 647.2 billion.

The budget deficit of 271.7 billion zloty is equalent to 6.5% of GDP, down from an expected shortfall of 6.9% this year. Poland is already subject to the European Union’s excessive deficit procedure, which requires member states to cut deficits below 3% of GDP.

Poland has dramatically ramped up defence spending since Russia’s full-scale invasion of neighbouring Ukraine in 2022. At around 4.5% of GDP this year, the country’s defence budget is already the highest in NATO in relative terms,

The next highest spenders this year are the Baltic trio of Lithuania (4%), Latvia (3.7%) and Estonia (3.4%). Among other large NATO members, the US is spending 3.2% of GDP on defence this year, the UK 2.4% and both France and Germany 2%, according to NATO figures.

The government had previously expressed an aim to raise the figure to 5% of GDP in 2026, and its newly outlined budget – which earmarks a record 200 billion zloty for defence – is close to meeting that target.

Justifying the large outlay despite a high deficit, Prime Minister Donald Tusk declared that “we won’t defend the Polish border with a small deficit. We will defend it with a modern, large army”.

His finance minister, Andrzej Domański, called the proposed spending plans “a budget for security, investment and, of course, support for citizens”.

Healthcare spending will climb by 25 billion to 247.8 billion, and funding is secured for major projects including Poland’s first nuclear power plant, a planned “mega airport” and transportation hub, and energy transition schemes.

Social programmes, such as the 800 zloty monthly child benefit and a recently introduced so-called “widow’s pension”, are also preserved.

The government expects GDP growth of 3.5% next year, slightly up from the 3.4% forecast for this year. Public debt, however, is anticipated to hit 66.8% of GDP under the EU’s methodology, above the bloc’s 60% ceiling.

Poland has been under the EU’s excessive deficit procedure since last year, after its shortfall exceeded the bloc’s 3% of GDP limit. Warsaw has pledged the fastest possible correction, aiming to bring the deficit down to 2.9% by 2028.

However, both the debt and deficit forecasts in the budget for next year are significantly higher than what Poland pledged to the EU for this period last year.

Meanwhile, the new president, Karol Nawrocki, an opposition ally with veto power, has vowed to block any attempt to raise taxes, adding to uncertainty over whether this is achievable. However, unlike with other types of bills, the president cannot veto the budget itself.

In July, the EU approved requests by Poland and 14 other member states to access a so-called “escape clause” that exempts their defence spending from budgetary rules.

Some economists have warned that the combination of costly social policies, record military spending, and infrastructure investment will keep Poland among the EU’s biggest deficit-runners.

Marcin Zieliński, chief economist and president of the Civic Development Foundation (FOR), told news website WNP that the government must find the courage to communicate the truth about the poor financial situation of the state.

“We have been living on credit for a long time, beyond our means…We need to tell people this honestly,” he said.

However, Rafał Benecki, chief economist at ING Bank Śląski, noted that, despite a large deficit, Poland remains the EU’s economic growth leader, “so it is able to finance it”.

Notes from Poland is run by a small editorial team and published by an independent, non-profit foundation that is funded through donations from our readers. We cannot do what we do without your support.

Main image credit: KPRM/Flickr (under CC BY-NC-ND 4.0)

Alicja Ptak

Alicja Ptak is senior editor at Notes from Poland and a multimedia journalist. She previously worked for Reuters.