Poland’s 7.3% GDP budget deficit and rising public debt may pressure the zloty, lifting EUR/PLN toward 4.35, Societe Generale warns.
Poland’s elevated fiscal deficit and surging public debt are weighing on the zloty, with EUR/PLN at risk of testing 4.35 amid investor caution. The 2027 draft budget, due Friday, could further test market appetite for Polish assets.
The deficit stands at 7.3% of GDP, with public debt rising rapidly. Fitch maintained Poland’s A- rating but kept a negative outlook, citing fiscal risks despite economic resilience and EU support. Societe Generale warns fiscal slippage may push 10-year POLGB yields above 6%.
Government plans to cut middle-class income taxes and raise corporate levies in 2027 aim to balance the budget, but markets remain wary of sustained fiscal pressure.