Poland has more than doubled its military spending, but the defense boom creates risks for the economy

Poland will spend around 4.8% of GDP on defense in 2026, compared with 2.2% before Russia’s full-scale war against Ukraine. Warsaw expects that the large-scale rearmament will not only strengthen the army but also give a boost to domestic industry; however, the rapid increase in spending is already creating problems for public finances, The Guardian reports, writes UNN.

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Poland’s defense budget this year amounts to around $53 billion—the fourth-largest figure in the EU after Germany, France, and Italy. At the same time, the country is trying to move from predominantly importing weapons to producing them domestically, creating new businesses and jobs.

One example is a new plant near Warsaw established by the European defense company MBDA.

Poland is moving from importing weapons to producing them at home

Military spending is putting increasing pressure on the budget

The defense boom also has a downside. Rising military spending has become one of the reasons why Poland’s budget deficit next year is expected to reach 7.1% of GDP—the highest level in the EU. Last week, Moody’s also downgraded the country’s long-term sovereign credit rating to its lowest level since 2002.

This path is not sustainable. You should ask whether Poland will be able to maintain its growth record and whether politicians will be ready to adapt

At the same time, Warsaw is trying to keep as much of its defense spending as possible within the country. Poland received the largest tranche of loans under the European SAFE program, worth €44 billion, and plans to direct nearly 90% of these funds to its domestic industry. However, substantial sums continue to go to American manufacturers, from which Poland purchases Patriot systems, Abrams tanks, and F-35 fighter jets.

Poland wants a Patriot plant and a permanent U.S. military base - media27.09.26, 14:37 • 7068 views