The end of social prosperity in Poland is near. Too much public debt

In four years, i.e. in 2029, the ratio of Polish public debt to GDP – according to the EU methodology (EDP) – will amount to 75.3%, exceeding the EU threshold by over 15 percentage points. Two of the three main rating agencies: Fitch and Moody’s have already drawn attention to the dangerous situation.

What are the risks of high public debt for Poles? It may lead to increased inflation, higher interest rates, more expensive loans, slower economic development, and financial instability. Most painfully, it also results in a reduction in the real income of citizens.

Poles are condemned to a high budget deficit because of the elections

– This year, next year and the next year, i.e. the election year 2027, are lost for any unpopular actions. Everyone will go to the elections with tax cuts and obligations to maintain existing privileges – predicts prof. in Interia Biznes. Witold Modzelewski, economist, specialist in financial law.

According to prof. Modzelewski, due to the fact that next year will be a pre-election year before the parliamentary elections in 2027, neither party – neither the government nor the opposition – will propose any actions to reduce the dynamics of debt growth. – To do this, it would be necessary to reduce the current budget deficit, preferably by acting with both hands: on the one hand, increasing budget revenues, and on the other hand, reducing expenditures – believes Witold Modzelewski.

– All forecasts rationally show that until then we are doomed to high budget deficits, high unreduced public expenditure and the absence of any unpopular decisions. Let us also remember that the president says that he will not sign any law increasing taxes – explains prof. Witold Modzelewski.

Social programs for a quick fix

The Civic Development Forum is also sounding the alarm. – It’s high time to start taking action on the expenditure side of the budget. The government is hiding behind defense spending, but it is not because of them that we have such a difficult situation in public finances, says Marcin Zieliński, president and chief economist of the Civic Development Forum.

According to Zieliński, income criteria should be introduced when granting support to families. – Because it is absurd that the 800+ benefit goes to everyone, regardless of income level. Thus, it ceases to be a social program, and it has also failed as a fertility support program. Likewise, I don’t see any justification for “grandma’s program” – it’s not a particularly activating program either, he says.