Poland’s 2026 Budget Prioritizes Defense as Deficit Target Slips

Poland’s government unveiled its 2026 budget, prioritizing higher spending on defense amid the war in nearby Ukraine over quickly reducing one of the European Union’s biggest fiscal deficits.

The cabinet revised up this year’s public-sector shortfall to 6.9% of economic output from 6.3%, and set a gap of 6.5% for 2026, Finance Minister Andrzej Domanski said on Thursday. Bond prices dropped, with benchmark yields rising to the highest level in two months.

“Curbing the deficit is key, but let’s remember the situation that Poland is in,” Domanski told reporters. “We have war beyond our border and we want ...