On August 28, 2024, the Council of Ministers adopted the draft of the state budget for 2025, which focuses on security, economic development, and citizen support. The new budget aims to restore the constitutional rank of the budget act and ensure greater transparency and control over public finances.
Restoration of the Role of the Budget Act
The government took the decision to restore the primary role of the state budget as a key act for managing public finances. The 2025 budget includes the repayment of obligations from bonds of the Polish Development Fund and COVID-19 Counteraction Fund, previously overlooked in budget considerations. The practice of transferring treasury securities as expenditures has been curtailed, and plans were outlined for government funds housed at the National Economy Bank in the justification to the draft budget act.
National Security
Record defense spending constitutes a key element of the 2025 budget. A total of 186.6 billion zloty was allocated for national defense, comprising 4.7% of the planned GDP for 2025. Compared to previous years, when defense spending amounted to 3.0% in 2022 and 4.2% in 2023-2024, the current plans represent a significant increase. Furthermore, more than half a billion zloty will be earmarked for modernizing border security with Belarus.
Support for Economy and Infrastructure Development
Substantial investments in the energy sector and infrastructure are included in the 2025 budget. A sum of 4.6 billion zloty is slated for the construction of the first nuclear power plant in Poland. Key infrastructure programs like the Central Communication Port, “Poland 100 Minutes” program, and the Railway+ project will continue. The investment expenditure financed by the public sector is expected to increase by 9.3% nominally.
Support for Citizens
The government plans a significant boost in health care expenditures, which in 2025 are projected at 221.7 billion zloty, an increase of 16.1% compared to the current year. Significant resources are designated for family support programs, such as “Family 800+” and “Active Parent”. The budget plan also includes increased expenses for retirement and disability benefits, including the 13th and 14th pension payments and the valorization of benefits.
Macroeconomics and Revenues
In 2025, the GDP growth of 3.9% is anticipated, along with a decrease in unemployment to 4.9%. The average annual inflation rate is expected to be 5.0%, with a gradual decrease predicted in the following years. The state budget’s income is expected to increase, including VAT revenues by 50.1 billion zloty and CIT by 9.2 billion zloty. Despite this, the state budget deficit is projected at 289 billion zloty, equating to 7.3% of the GDP, mainly due to high liabilities and debt repayments.
Conclusion
The 2025 budget, approved by Donald Tusk’s Government, focuses on priorities related to security, health, and economic development. Despite the challenges associated with previous financial commitments, the new budget aims to support key investments and social programs while ensuring transparency and effectiveness in managing state finances.
Source: https://managerplus.pl/nowy-budzet-priorytety-rzadu-na-2025-rok-77990
