Poland’s defence spending is projected to reach 4.7 per cent of GDP by the end of 2024, despite the government’s acknowledgement of a revenue shortfall this year.
That predicted figure comes as part of a European effort to bolster defence capabilities in the wake of Russia’s invasion of Ukraine in 2022.
Poland already leads NATO in defence spending and has become its third-largest army by personnel. The country’s share of equipment spending has exceeded 20 per cent of NATO guidelines.
Warsaw’s defence bill of €35 billion could exceed that of any of its Central European neighbours and the Baltic republics, experts said.
Prime Minister Donald Tusk’s government has pointed out that contracts signed before his term in office could have contributed to a fiscal deficit estimated at 12.5 per cent of projected GDP by 2025.
Deputy Defence Minister Pawel Bejda said earlier in October the government would seek funds to cover the underestimated costs, although there are no plans to suspend spending programmes. These include a €4.3 billion contract for the purchase of 32 US-made F-35 fighters from Lockheed Martin.
Despite spending increases, the government said it expected a revenue shortfall of almost €10 billion this year, equivalent to the cost of 96 Apache attack helicopters. With debt hovering around 50 per cent of GDP, the pressure on Poland’s finances could complicate its borrowing capacity.
US credit rating agency Fitch Ratings warned in mid-October of the need for a medium-term plan to reduce the deficit and stabilise debt, while S&P Global indicated that the 2025 Polish presidential elections could complicate the European Union’s fiscal targets.
Tusk is not in a comfortable political position at home, under internal pressure from his coalition partners and the Conservative opposition. For the time being, though, the former European Council president has the full support of Brussels.
Germany has reportedly blocked Poland’s involvement in a key meeting on Ukraine. https://t.co/8NVw0JWiQn
— Brussels Signal (@brusselssignal) October 21, 2024
