Polish govt to discuss 2026 budget on Thursday: Premier Tusk

Polish govt to discuss 2026 budget on Thursday: Premier Tusk

Polish Prime Minister Donald Tusk has announced that the government will discuss the 2026 budget on Thursday, June 10. This comes amidst growing fiscal uncertainty following the recent presidential election, which saw Karol Nawrocki, a conservative nationalist, triumph over Rafał Trzaskowski [2].

The election victory of Nawrocki, who is aligned with the opposition and supported by the Law and Justice party, has raised concerns about the future of Poland's fiscal policies. The new president's victory could potentially delay reforms and increase the government's reliance on fiscal measures, as analysts have warned [1].

Poland faces significant spending demands, including a rise in defense outlays due to Russia's invasion of Ukraine, and grapples with the EU's second-highest fiscal deficit. The outgoing president, Andrzej Duda, has used his veto powers to block some of Tusk's political agenda, and Nawrocki could employ similar tactics [1].

The International Monetary Fund (IMF) projected Poland's economy to grow 3.2% this year and 3.1% in 2026, but the European Commission forecast a higher deficit for 2025 and 2026, nearly double the average for the 27-member EU [1]. The yield on Poland's 10-year domestic government bond is currently around 5.5%, below the 6% mark it hovered around for much of the first three months of the year [1].

The Polish government has a narrow window before the next election in 2027 to craft a medium-term fiscal adjustment. Some economic analysts say the ability to do so now looks more uncertain, with the loss by the ruling coalition in the presidential election making fiscal tightening measures more challenging [1].

Prime Minister Tusk's government faces political pressure to fulfill electoral promises, such as doubling the income tax-free threshold, which is estimated to cost 55 billion zloty ($14.76 billion) [1]. The political demand for such a measure directly conflicts with the economic imperative of fiscal consolidation.

As the government prepares to discuss the 2026 budget, investors and financial professionals are closely watching the developments. The upcoming budget discussion will provide insights into the government's fiscal plans and the potential impact on Poland's economic trajectory.

References:
[1] https://wibqam.com/2025/06/02/analysis-polish-nationalists-election-victory-deepens-fiscal-uncertainty/
[2] https://www.euronews.com/my-europe/2025/06/03/polands-pm-donald-tusk-says-government-confidence-vote-will-take-place-on-11-june