Responsible but Generous – 2025 Budget Adopted
28.08.2024
Record expenditures on defense and health, benefits for citizens, economic revival, a GDP growth of 3.9%, and a decrease in unemployment – these are the main directions of fiscal policy for the next year. On Wednesday, August 28, 2024, the Council of Ministers adopted the budget plan for 2025. The details were presented at a press conference by Prime Minister Donald Tusk and Finance Minister Andrzej Domański.
2025 Budget Plan
Donald Tusk's government inherited financial burdens generated by the previous government. In 2025, the state budget will repay PLN 63.2 billion of obligations in the form of bonds along with the interests of the Polish Development Fund and the Bank Gospodarstwa Krajowego.
"The war forces a change in the structure of expenditures and proportions in many areas, including economic ones. We inherited a country in bad shape from our predecessors. We set the bar very high for ourselves. This also shows the whole philosophy of our policy. Despite difficult circumstances, we want and have achieved what is currently happening in Poland: inflation under control, a record economic growth in years, a real increase in the minimum wage, and the start of investments - especially those key ones related mainly to energy and railway infrastructure,"
- explained the Prime Minister.
The main assumptions of the 2025 budget foresee revenues at the level of PLN 632.6 billion and expenditures amounting to PLN 921.6 billion. The government restores the budget's proper constitutional rank and ensures transparency in the flow of public funds.
"The 2025 budget is created under conditions of a clearly accelerating Polish economy. After the zero economic growth we inherited from our predecessors, this year we expect the Polish economy to grow at a rate of 3.1%. For 2025, we anticipate further acceleration to 3.9%,"
- announced Finance Minister Andrzej Domański.
The government expects the state budget deficit to reach PLN 289 billion. High costs are associated with previous obligations and restoring the central role of the state budget.
"However, this deficit should be put into comparable conditions and remember that this deficit includes repayments of PFR obligations for PLN 34.7 billion and the COVID-19 Counteraction Fund for PLN 28.5 billion. The funds we have secured for the reform of revenues of local government units [...]. This amount also includes the statutory increase in health care spending and the lack of payment of profits from the NBP. In comparable conditions to 2024, it would amount to PLN 181 billion,"
- explained the head of the finance department.
As part of expected revenues, the Council of Ministers anticipates a significant increase in VAT revenues by PLN 50 billion, in CIT by over PLN 9 billion, and in excise duty by over PLN 8 billion.
Record Funds for Defense
Ensuring the safety of Polish women and men is one of the priorities of the current government. In 2025, expenditures on national defense will be record-breaking and amount to as much as PLN 186.6 billion. This is PLN 28.6 billion more than this year.
"We have prepared a budget for building and strength. We will build what is necessary both due to the direct security of Poland and energy security. We also decided on record-high defense expenditures,"
- emphasized Donald Tusk during the press conference.
Planned expenditures for the Polish military, including salaries for professional soldiers, will amount to 4.7% of GDP. Next year's budget also includes costs incurred by the Armed Forces Support Fund.
Caring for the Health of Poles
The second pillar will be record-high funds for healthcare. The Council of Ministers set the budget for this purpose in 2025 at PLN 221.7 billion, about 16% more than currently.
"We still remember and think about supporting citizens. We will allocate almost PLN 222 billion for healthcare. This is a record increase in expenditures, by nearly PLN 31 billion. Within this budget, we continue important programs, such as the financing of in vitro, for which we have allocated half a billion zlotys,"
- announced the chairman of the Economic Committee of the Council of Ministers.
In 2024, health care consumed PLN 190.9 billion of public funds.
Socio-Economic Actions
The Council of Ministers has decided, among other things, to continue the "Family 800+" and "Good Start" programs, payment of the 13th and 14th pensions, support for people with disabilities, and securing contributions for people who will take parental and maternity leave.
"In 2024, when we were adjusting the budget inherited from PiS, we were obliged to make very large payments resulting from previous ideas that needed to be financed. Here a classic example is the pre-election program "Family 800+". Despite the serious challenges we faced, not only did we ensure its funding, but we decided on record-high raises for teachers and the entire budget sphere. Recently, we made decisions that will result in a radical increase, by current standards, in the wages of social workers. This autumn, the so-called granny allowance will be paid out,"
- listed the head of the government.
Next year will also bring a 5% increase in salaries for teachers, budget sector employees, ZUS, and KRUS. The budget of the Ministry of Science and Higher Education, including financial outlays for science and higher education, will increase by 8% compared to 2024.
"In 2024 there are actions. The budget records our intentions and actions for 2025. It will be a generous budget. Economic growth will be economic growth in the pockets of Polish women and men. One does not contradict the other. True wage growth has clearly outpaced inflation,"
- said Prime Minister Donald Tusk.
From March 1, 2025, the government plans to allocate PLN 24.2 billion for the valorization of their benefits. During the meeting of the Council of Ministers, a decision was made to include the so-called widow's pension in the budget. We will allocate PLN 3.2 billion for this purpose.
"We were determined, we achieved this, and we will continue to combine economic growth and the good condition of the Polish economy with the material, financial security of people, especially those most in need. This is the greatest achievement we can be truly proud of,"
- stated the Prime Minister.
Thanks to the improvement in the pace of economic growth, we predict that in 2025 unemployment will fall to 4.9%, and the average salary in the national economy will increase by 7.1%.
"I would like to point out that in 2024 we are witnessing the highest real wage growth dynamics for Poles in the 21st century by over 9%. We believe that next year wages will also continue to rise significantly in real terms,"
- said Minister Domański.
The draft budget law for 2025 will be submitted to the Social Dialogue Council.