The end of the year brings disastrous news. The state budget is falling apart, and public debt is growing faster than would be expected from the pace of fiscal consolidation. In recent days, very alarming signals have been coming from the International Monetary Fund.
The International Monetary Fund is blunt. In 2025, the public finance deficit is expected to reach around 7% of GDP, and public debt may climb to nearly 60% of GDP.
These numbers speak for themselves. It would be one of the highest deficits among countries on the Old Continent — and that’s without an economic collapse that would normally explain such a scale of crisis.
The worst part is how this problem emerged. The IMF points out that in recent years the deficit has widened because expenditures have surged. The Fund calculates an increase in spending of 6.5% of GDP, while revenues grew by only 1.2% of GDP. Put plainly, the state began to spend much faster than its income grew. At the same time, debt started rising at a pace of about 5% of GDP per year.
The most dangerous moment comes when debt begins to push up its own costs. The IMF warns that with a large deficit and no significant cuts or reforms, the market may suddenly turn away. Then the state has to borrow at higher costs. And when borrowing becomes more expensive, more budget funds go toward interest payments instead of other expenditures.
As a result, the IMF has raised its assessment of the risk of tensions surrounding Poland’s debt from low to medium. According to its baseline scenario, with moderate consolidation of about 2% of GDP, the debt will keep rising and reach 76% of GDP by 2030. This is a disastrous outlook, which is why the Fund recommends a cumulative fiscal consolidation of around 4% of GDP by 2030 in order to bring the deficit closer to 3% of GDP and stop the debt from increasing. At the same time, it notes that the scale of actions planned for 2026 is small compared to what would be needed to regain control.
There is additional pressure from the European Union. Poland has been given a target to reduce its excessive deficit by 2028. What does this mean? Above all, pressure to limit the pace of spending growth in the coming years. If the deficit does not begin to fall quickly, the room for maneuver will shrink. And when the budget loses room for maneuver, only options remain that no one likes: deep cuts, new burdens, or both at once. And all Poles will feel it very strongly.