Poland's deficit and debt draw warnings as Domański nears deputy PM post

Nomination without a date yet

Prime Minister Donald Tusk has announced a motion to appoint Andrzej Domański as deputy prime minister. Domański, the finance minister, is criticised by government opponents over a deficit that critics put at over 281 billion zloty and over rising debt, and the opposition wants him to leave office immediately. Presidential spokesman Rafał Leśkiewicz told a press conference on 12 November that responsibility for the nomination rests with Tusk, and that the exact date would be announced once it is decided. He said the decision could be expected within days, noting that the president was attending an economic congress in Poznań that day, where he was also holding talks with the president of Slovakia. Tusk defended his minister in strong terms.

“Domański is really an outstanding minister, because he manages to keep the Polish state and its finances within safety limits”

Deficit and debt path

The government's draft 2027 budget keeps the deficit of the whole public sector at 7.1% of GDP, the same level as this year, rather than reducing it. Government and local-government debt is projected at about 75% of GDP in 2027, and without consolidation it could rise above 100% of GDP. Debt servicing costs are set to reach 2.7% of GDP in 2026 and 3.6% in 2030, according to the government's debt management strategy.

20262.7%

20303.6%

2026

2.7 %

2030

3.6 %

Data from the article text

Sławomir Dudek, chair of the Fiscal Council, describes the situation as a slow rot rather than a single crisis. Services are deteriorating gradually, public-sector pay is rising only with inflation in parts of the sector, and staff are beginning to leave.

“The longer the rot of public finances lasts, the more painful the later repair will be”

Size of the repair

International institutions and Polish economists judge that the deficit needs to fall to 3-4% of GDP, an improvement of 3-4 percentage points. At today's prices, that means a balance improvement of roughly 120-160 billion zloty. Ludwik Kotecki, a board member of the National Bank of Poland, proposes spreading the consolidation over four years, cutting the deficit by 0.7-0.9 percentage points of GDP a year, or about 28-36 billion zloty annually. Rzeczpospolita names tax and pension privileges, the 800+ child benefit and defence spending as areas where economists see the most room for savings.

Timing and ratings

Credit Agricole Bank Polska estimates that cuts started now could reach 0.8% of GDP a year. It warns that if consolidation starts only after the parliamentary elections in 2028, the adjustment becomes harder. S&P has cut its outlook on Poland's credit rating, adding pressure on the government to present a credible repair plan. A former deputy prime minister and finance minister, who took Poland to international capital markets 30 years ago, wrote in Rzeczpospolita that the government's policy has driven Poland's ratings down despite relatively high growth, and suggested it may already be too late to act.