With a fourteen-point lead, why does the Civic Coalition cap the deficit at 7.1%?

The remaining gap falls on social spending. According to the draft budget, the 'Family 800+' child benefit amounts to PLN 60.8 billion; the 13th and 14th monthly pensions total PLN 32.1 billion; the 'Active Parents' childcare allowance stands at PLN 7 billion; and approximately PLN 19 billion is allocated for pension indexation. Based on the draft’s defense expenditure figures, nominal GDP in 2027 is projected at roughly PLN 4.39 trillion—meaning the 'Family 800+' program alone accounts for 1.38% of GDP, while the two additional pension payments together represent 0.73% (author’s calculation based on draft figures). To be fair, both the 'Family 800+' program and the 14th-month pension were introduced during the Law and Justice Party (Prawo i Sprawiedliwość, PiS) government. Yet this coalition has not repealed them—in fact, it has expanded them. The widow’s pension (renta wdowia), a flagship policy of the Left Alliance (Lewica), is scheduled under the draft to rise from 15% to 25% of the second pension starting 1 January 2027. This timeline was fully accepted by the current government led by the Civic Coalition (Koalicja Obywatelska, KO). Where will the money come from? On the revenue side, the draft opts to raise taxes on businesses and high-income earners. The corporate income tax rate for banks will increase from 19% to 30% in 2026, fall to 26% in 2027, and settle at 23% from 2028 onward. For large enterprises with revenues exceeding €50 million in the prior year, the standard corporate tax rate is proposed to rise from 19% to 22%. A new 24% personal income tax bracket is introduced for incomes between PLN 120,000 and PLN 150,000, while the threshold for flat-rate taxation based on turnover is lowered from €2 million to €250,000. This package carries two layers of cost. First, the corporate tax hike targets the largest group of investment actors—yet the draft simultaneously aims to spur private complementary investment in nuclear power, offshore wind, and defense procurement. Second, even with these tax increases, the deficit remains at 7.1%. The newly raised revenues are fully absorbed by new transfer payments—not a single zloty is left for deficit reduction. Moody’s also highlighted a structural issue: “An increasingly large portion of debt accumulation occurs outside the scope of national debt rules.” A substantial share of the draft’s defense spending flows through the Armed Forces Support Fund—a vehicle operating outside the regular state budget. As cited by *Polish Notes*, analysts from ING Bank Śląski (part of ING Group) wrote on the day the draft was published that Poland “has made no progress—and taken no action—toward correcting its excessive deficit”; their report further warned that domestically calculated debt could hit the statutory ceiling set by the Public Finance Act as early as 2028 or 2029. According to *Brussels Signal*, Finance Minister Andrzej Domański responded to the downgrade by stating the government views the decision “seriously but calmly,” adding that the Polish economy “is growing rapidly and fundamentals remain strong.” One year until the next election Poland’s next parliamentary election will be held in autumn 2027. The Sejm comprises 460 seats, allocated across 41 constituencies using the D’Hondt method; a single party must secure at least 5% of the national vote, while multi-party electoral alliances require at least 8%. An Opinia24 poll conducted from 7–9 September (sample size: 1,001) found support at 31.4% for the Civic Coalition, 17.5% for Law and Justice, 12.6% for the Confederation (Konfederacja), 7.2% for the Left Alliance, 6.9% for the Polish Crown Confederation (Konfederacja Korony Polskiej), 5.7% for 'Development Plus' (Rozwój Plus)—a new party launched by former Prime Minister Mateusz Morawiecki—4.2% for Razem (Together), 2.2% for the Polish People’s Party (PSL), 1.4% for Poland 2050, and 10.4% undecided.

With one year to go until the next general election, why does Poland keep the deficit at 7.1% of GDP?

The Public Opinion Research Centre (CBOS) surveyed 1,000 Polish adults from 17–20 August—80% via telephone, 20% online. Among all respondents, support stood at 25.8% for the Civic Coalition (Koalicja Obywatelska, KO), 16.5% for Law and Justice (Prawo i Sprawiedliwość, PiS), 13% for the Confederation (Konfederacja), 8.2% for the Polish Crown Confederation (Konfederacja Korony Polskiej), 4.4% for Razem (Together), 3.8% for New Left (Nowa Lewica), 3.6% for 'Development Plus' (Rozwój Plus)—a party slated for launch by former Prime Minister Mateusz Morawiecki in October—3.4% for Poland 2050 (Polska 2050), and 2.4% for the Polish People’s Party (PSL). Seventy-four percent said they would vote. Because this survey reports results among *all* respondents—not only those who have decided how to vote—the party percentages are lower than those calculated on an effective-vote basis and cannot be directly compared with other polls. Law and Justice’s 16.5% marks its lowest CBOS reading since the 2023 parliamentary election; CBOS links this decline to internal party divisions. Effective-vote-based readings also exist. United Surveys by IBRiS, commissioned by *Virtual Poland*, interviewed 1,000 people via mixed telephone and online methods from 10–12 July, yielding support levels of 28.6% for the Civic Coalition, 23.0% for Law and Justice, 15.7% for the Confederation, 10.2% for the Polish Crown Confederation, 7.5% for New Left, 5.2% for the Polish People’s Party, 4.0% for Razem, and just 0.6% for Poland 2050. Regardless of methodology, all readings point to the same conclusion. An IBRiS poll for *Republica* (2–3 July), converted into seat projections, yields 168 seats for the Civic Coalition, 136 for Law and Justice, 72 for the Confederation, 54 for the Polish Crown Confederation, and 30 for New Left. The Civic Coalition plus New Left totals 198 seats—33 short of the 231 needed for a majority. Parties falling below the electoral threshold forfeit their votes entirely; thus, the loss of parliamentary seats for such parties exceeds their proportional loss of votes. Next August, the same form must be submitted The next Sejm election will take place in autumn 2027. This 2027 budget is therefore the last full-year budget the Tusk government can implement before the election year. It defers fiscal consolidation to the next government, passes the interest bill to next year, and leaves the explanation to Brussels for the Ministry of Finance’s next letter. There is only one question the ruling coalition truly needs to answer in its autumn debate: With corporate and banking income tax rates already adjusted upward—and personal income tax rates still being cut—what line item within the PLN 97.76 billion in expenditures will actually be reduced?

Polish Finance Minister Rules Out Budget 'Gifts' Ahead of Election

1 day ago

Poland's Finance Minister rejected additional pre-election spending following a Moody's downgrade, highlighting fiscal constraints. The government faces a standoff over a vetoed windfall tax on oil and gas companies aimed at stabilizing fuel prices.

bloomberg

2026-09-28

Polish Finance Minister Rules Out Budget 'Gifts' Ahead of Election

Polish Finance Minister Rules Out Budget 'Gifts' Ahead of Election

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