PiS’s former deputy prime minister and defense minister, Mariusz Błaszczak, further warned that Fitch’s outlook cut “signals increased risk for investors, which could lead to higher borrowing costs on international markets.” This, in turn, could squeeze the defense budget and force the government to look for savings or new funding sources, he added.
Growing defense burden
Poland is NATO’s top defense spender relative to economic output, with 4.7 percent of GDP currently earmarked for that purpose. The country has recently joined the $1 trillion economy club and is set to attend the G20 summit in Miami in 2026 as an observer.
Fitch underlined that the start of Nawrocki’s presidency “highlights likely challenges for the coalition government to implement policy. Since early August, the president has vetoed various bills and publicly stated his opposition to tax increases and proposed tax cuts.”
With political tension already running high in the wake of this year’s presidential election, domestic considerations will increasingly dominate fiscal decisions in the run-up to the parliamentary vote in 2027.
The election cycle could further weaken fiscal discipline, especially as “options for raising revenue are limited and a significant share of spending is rigid,” Poland’s Bank Millennium said in a note.
Fitch projects the deficit will average 6.7 percent of GDP through 2025 due to the “lack of a credible consolidation strategy” before the next election. The figure is likely to hit 6.9 percent before the end of 2025, before easing slightly to 6.8 percent in 2026, still above the government’s budget projections of 6.5 percent.