Warsaw: Poland plans to issue zloty-denominated bonds as well as euro and US dollar debt in the coming years, the government says in its debt management strategy for 2025 through 2028.
Prime Minister Donald Tusk’s government held a special meeting last Saturday to modify 2025 budget assumptions after devastating floods hit the south-western region of the country this month.
“The priority of the issuance policy will be to build large and liquid issues with fixed interest rates, both on the domestic market and on the euro and US dollar markets,” the prime minister’s chancellery said in a statement last Saturday.
Poland sees the share of the foreign exchange bonds at below 25% of the total issuance, with possible variations depending on market conditions.
The Cabinet expects debt servicing costs to rise to about 2.3% of gross domestic product in 2027 and 2028 from 1.9% in 2025.
Poland’s general government debt will increase to 58.4% of economic output in 2025 from 54.6% this year, and is expected to exceed the European Union’s limit of 60% in 2026, the government also said.
The European Union’s executive has already reprimanded the government in Warsaw for breaching the bloc’s deficit limit of 3% of economic output in 2023 and is likely to recommend cuts, which Tusk wants to avoid ahead of presidential elections next year.
In August, the government proposed a 2025 budget draft with the public sector deficit estimated at 5.5% of economic output. The Cabinet upheld the deficit projection and other macro assumptions for the 2025 budget last Saturday. — Bloomberg
