Poland's budget deficit reaches 141 billion PLN over first seven months of 2026

Seven-month deficit and spending figures

Poland's state budget deficit reached 141.06 billion PLN at the end of July 2026, according to preliminary execution data published by the Ministry of Finance. The cumulative shortfall represents 51.8% of the 271.74 billion PLN maximum deficit permitted under the 2026 budget law. Total state expenditures reached 474.97 billion PLN during the seven-month period, which accounts for 51.7% of the 918.94 billion PLN annual allocation. State revenues amounted to 333.9 billion PLN, representing 51.6% of the planned 647.2 billion PLN for the year. The deficit increased by over 17 billion PLN in July alone, having stood at more than 123.7 billion PLN at the end of June. Total spending grew by approximately 4.4 billion PLN, or 0.9%, compared to the 470.6 billion PLN disbursed across the same period in 2025.

Tax revenue drivers and fuel tax cuts

Tax revenues collected between January and July 2026 reached 295.7 billion PLN, an increase of 18.3 billion PLN or 6.6% compared to the first seven months of 2025. Value-added tax receipts amounted to 192 billion PLN, representing a year-on-year increase of 3.7 billion PLN or 2.0%. Corporate income tax revenues totaled 52.1 billion PLN, rising by 11.7 billion PLN or 28.9% following a higher tax rate applied to commercial banks. Excise duty revenues reached 52.3 billion PLN, gaining 0.8 billion PLN or 1.7% year-on-year. In contrast, personal income tax receipts registered at minus 16.4 billion PLN, dropping by 0.8 billion PLN or 5.4% due to the second year of local government revenue reform that allocates larger shares to municipalities. The Ministry of Finance stated that indirect tax collection reflected the government CPN programme, which cut VAT on liquid fuels from 23% to 8% and reduced excise duties on diesel by 24% and petrol by 19%, creating an estimated cost of 4.7 billion PLN.

Political reactions and sovereign rating concerns

Opposition politicians criticized the financial results, contending that revenue growth lagged behind macroeconomic expansion. Former prime minister Mateusz Morawiecki highlighted that retail sales expanded 3.5% and industrial production rose 3.9% in the first half of 2026, while full-year nominal gross domestic product growth is forecast at 7.6%. Morawiecki stated that the 4.7 billion PLN fiscal cost of the fuel programme does not explain why VAT and excise receipts rose by only 2% and 1.7% respectively.

Public finances are reaching a state where we face a rating downgrade as soon as this week.

Lawmaker Zbigniew Kuźmiuk argued that tax revenues should have reached over 58% of annual projections by the end of July rather than 51%, leaving a shortfall of roughly 50 billion PLN.

What is worrying is the weak performance of tax revenues. They are executed at 51 percent after seven months, which means one month of revenue is missing.

Former Orlen executive Daniel Obajtek stated that the seven-month deficit was eleven times higher than the 13.1 billion PLN deficit recorded after July 2023.

Fiscal outlook and expenditure pressures

Economists expressed caution regarding the underlying momentum of public revenues given steady domestic consumer spending. Janusz Jankowiak observed that weak VAT performance limits the government's ability to reduce the shortfall without administrative changes.

If the situation does not change, the budget result visible in the deficit level will not improve noticeably.

Jankowiak estimated that general government fiscal consolidation between 2025 and 2026 would reach roughly 0.3 percentage points at best. He pointed out that the Ministry of Finance may shift specific expenditures into subsequent reporting periods to prevent a formal budget amendment later in the year. Kuźmiuk similarly noted that statutory limits prevent the finance minister from exceeding the authorized annual deficit, making end-of-year expenditure curbs likely. In addition, financial observers noted that a comprehensive evaluation of state liabilities requires monitoring spending within extra-budgetary funds.