The Fiscal Council does not have good news for the government. He warns against postponing decisions
The Fiscal Council, which has been operating since the beginning of 2026 – an independent, apolitical and expert public institution whose main task is to provide opinions on the compliance of the draft budget act with national and EU fiscal rules as well as macroeconomic forecasts used for the purposes of this act, has held one of its first meetings.
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Fiscal Council points to deficit and debt problems
The Fiscal Council discussed, among others: annual report of the International Monetary Fund, which summarizes the condition and prospects of the Polish economy. It follows that The problem remains the scale of the general government deficit, which, according to forecasts, has increased to approximately 7%. GDP in 2025 and is largely structural rather than cyclical. This is a situation in which the space for fiscal policy response in the event of an unexpected negative shock in the economy remains limited.
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According to the IMF report, the deficit reduction scenario based mainly on maintaining certain expenditures unchanged and freezing the parameters of the tax scale in PIT will not allow to stop the growth of debt, the ratio of which to GDP will be 78%. in 2031
The fund recommended faster fiscal consolidation, including a total adjustment of at least 4%. GDP by 2030which is approximately twice as large as would result from the government's current plans. According to the Fund's estimates, this would stabilize the debt at a relatively high level of approximately 70%. GDP (higher than the reference value).
The Fiscal Council recommends increasing public revenues or reducing expenditures
In a statement after the meeting, the Fiscal Council admitted that it shared the IMF's position Stabilizing public debt should be a priority of economic policy and the actions presented so far by the government may turn out to be insufficient to achieve this goal.
“If Poland wants to maintain the current level of public spending, it will be necessary to permanently increase public revenues. Alternatively, with limited social and political acceptance for an increase in tax burdens, a reduction in public spending will be necessary“- we read in the announcement.
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The Council emphasizes that the scale of the imbalance is so large that consolidation must include many solutions, both on the expenditure and revenue side.
“Any actions and proposals that may increase expenses or reduce revenues should be implemented only exceptionally, prudently, after a thorough analysis of their long-term impact on the state of public finances,” he emphasizes.
The Council emphasizes that the durability and effectiveness of fiscal consolidation on a scale of several percent of GDP is greater when there is the broadest possible socio-political agreement on its basic objectives, parameters, time horizon and principles for the selection of instruments – so as to maintain the credibility of the process regardless of current disputes and the political cycle. Postponing actions increases the risk of having to bear more severe fiscal adjustment costs in the future.
