This article is a part of Poland Unpacked. Weekly intelligence for decision-makers
Interactive chart Every year, Poland’s Ministry of Finance publishes a four-year debt-management strategy. The latest edition covers 2027–2030. Public debt measured under the EU methodology is projected to rise to 76.6% of GDP by 2030.
Prudential procedures in 2029 or 2030?
If the government’s public-debt forecasts materialize, the 55% of GDP prudential threshold set out in Poland’s Public Finance Act would be breached in 2028. That would trigger the statutory prudential procedures in 2030.
The required measures would include, for example, adopting a state budget with no deficit, or with a deficit low enough to ensure that the ratio of State Treasury debt to GDP declines; freezing pay increases for employees in the state budget sector; and limiting the indexation of pensions and disability benefits to inflation.
Interactive chart Over the strategy horizon, the ratio of public debt under the domestic definition to GDP is projected to remain below the constitutional threshold of 60%, reaching 59.2% in 2029. The estimates, however, assume a gap between expenditure or costs planned under the limits included in the financial plans of general-government entities and their actual execution.
In 2027, the difference between the version based on expenditure limits and the adjusted version amounts to 1.1–1.2 percentage points of GDP. This means that under the limits-based scenario, Poland would most likely breach the public-debt thresholds already in 2027, forcing the prudential procedures to be activated in 2029. Without this assumption, the strategy would probably also point either to a breach of the constitutional threshold or to the need for earlier and deeper cuts.
The scale is enormous
One of the most important elements of the strategy is the fiscal path, which directly determines the trajectory of Poland’s various public-debt measures described above. According to the Ministry of Finance, it has been prepared within both the domestic and EU fiscal frameworks.
The chart above compares Poland’s general-government deficit, measured under the EU methodology, in the latest strategy and in last year’s edition. Between 2025 and 2027, the deficit is now expected to be 0.4–1.4 percentage points of GDP higher than projected a year ago.
The key issue, however, is the scale of the subsequent deficit reduction that will be required. In 2029–2030, the adjustment will amount to as much as 2.6 percentage points of GDP. In practice, this means expenditure will have to be cut by that amount and/or taxes increased.
And because public-debt servicing costs are projected to rise by 0.3 percentage points of GDP over the same period, the adjustment required elsewhere in the public-finance sector will be even larger. It will amount to around 3 percentage points of GDP over two years.
That is an enormous adjustment. To put it in perspective, it is worth citing the European Fiscal Board, which wrote this spring: “The estimated adjustment after the end of the escape-clause period could be close to or above 1% of GDP per year, well above the level commonly considered achievable for a given country.”
Slower GDP growth
Such tightening will have a significant impact on real GDP growth in Poland. The Ministry of Finance expects growth to slow to only around 2% in 2029–2030, assuming there are no major disruptions to the global economy during that period. As recently as spring 2026, the forecast for GDP growth in 2029 stood at 2.6%.
I have been warning about such a scenario in XYZ for some time: the government has postponed fiscal consolidation, and the consequences are likely to return with twice the force after the 2027 election. Fiscal policy should become one of the central issues of the campaign, together with the need to devise a plan that would mitigate the economic consequences of such a large tightening.
Domestic or EU rules?
The strategy does not explain how much of the tightening in 2029–2030 is driven by EU rules and how much by domestic constraints, particularly the breach of the 55% debt threshold. This matters because the adjustment path could potentially be softened by extending the next fiscal plan to seven years.
That would require structural reforms to be agreed with the European Commission and then implemented. The process would be broadly similar to Poland’s National Recovery Plan.
If the opposition wins the 2027 election, this could become a source of conflict between Warsaw and Brussels. Poland has already seen a taste of such tensions in the reaction to SAFE. But even if the current governing coalition wins, the process would not necessarily be easy. That would be the case, for example, if the European Commission were to require – on economic grounds – an increase in the retirement age for women as part of the reform package.