President Karol Nawrocki signed the 2026 budget act while simultaneously referring it for subsequent review by the Constitutional Tribunal. This move underscores a deep political and economic dispute over the direction of Poland’s fiscal policy. According to the President, the adopted budget constitutes a “budget of chaos,” marked by unfulfilled promises and posing risks to key public sectors, including healthcare and the long-term stability of public finances. The figures contained in the budget highlight both its scale and its risks. Planned government spending is expected to reach approximately PLN 919 billion, while the projected deficit exceeds PLN 271 billion, making it one of the largest budget gaps in Poland’s modern history. Public debt is forecast to approach 53.8% of GDP—still below the constitutional prudential threshold of 55%, but already raising serious concerns about long-term fiscal sustainability.

Although President Nawrocki does not possess the constitutional authority to veto the budget, he emphasized that its assumptions deviate from citizens’ expectations and from the principles of prudent fiscal policy. He pointed in particular to inconsistencies in spending priorities and the risk of underfunding essential public services. At the same time, he acknowledged that refusing to sign the budget would have risked institutional paralysis, including delays in financing public wages, pensions, and core state obligations. The referral of the budget to the Constitutional Tribunal is therefore primarily political and symbolic. The government was quick to reiterate that fiscal and economic policy falls within its constitutional competence and that the budget has already entered into force and will be implemented as adopted. Nevertheless, the episode highlights growing tensions over fiscal governance and the lack of a credible long-term strategy to restore budgetary discipline.

Against this backdrop, experts from the Warsaw Enterprise Institute (WEI) and the Civic Development Forum (FOR), in their joint report “Budget S.O.S.”, provide a comprehensive diagnosis of Poland’s public finances and propose concrete reforms aimed at stabilizing the budget over the next three years. The report calls for a shift away from financing expanding expenditures through rising deficits and public debt toward rational fiscal consolidation without increasing the tax burden on citizens.

According to the authors, Poland’s key budgetary challenges include public spending exceeding 50% of GDP, a structurally persistent deficit, and mounting demographic pressures that drive social and pension expenditures. To address these issues, the report proposes reforming social transfers by replacing universal, non–means-tested programs with targeted support for the most vulnerable households, raising and equalizing the retirement age at 67, privatizing non-core public assets, and improving tax enforcement—particularly by reducing the VAT gap—rather than raising taxes. The authors conclude that consistent implementation of these reforms could reduce the deficit toward 2% of GDP and stabilize public debt at a level compatible with long-term fiscal sustainability, helping restore stability without further burdening taxpayers”.

Source, Łukasz Wojdyga Director of the Center for Strategic Studies Warsaw Enterprise  nstitute mail: This email address is being protected from spambots. You need JavaScript enabled to view it.