Poland's Deficit Sparks Concern Amid Rising Defense Expenditures

Poland's general government deficit increased to 6.6% of GDP in 2024, up from 5.3% the previous year, primarily due to heightened defense spending and reduced VAT revenues. Finance Minister Andrzej Domanski highlights these factors, alongside flood-related expenses, as crucial in driving the deficit rise.

Poland has reported a rise in its general government deficit, climbing to 6.6% of the gross domestic product (GDP) in 2024 from 5.3% in the previous year.

This surge is attributed mainly to increased defense spending, a decline in VAT revenues, and flood-related expenses, according to Finance Minister Andrzej Domanski.

The data, released by the statistical office on Tuesday, also shows a rise in the public debt to GDP ratio, reaching 55.3% compared to 49.5% in 2023. Predictions indicate a reduction in the deficit to 5.5% by 2025, with further declines expected in subsequent years.

(With inputs from agencies.)