International Monetary Fund Executive Board concludes Poland Article IV consultation and calls for 4 percent of GDP fiscal adjustment

The International Monetary Fund (IMF) Executive Board concluded the 2025 Article IV consultation with the Republic of Poland and endorsed the staff appraisal on a lapse-of-time basis, highlighting strong near-term growth prospects alongside materially widened fiscal imbalances and the need to stabilize public debt. Growth is projected at 3.3 percent in 2025 and 3.5 percent in 2026, supported by increased execution of European Union funds and recent monetary easing. Fiscal vulnerabilities were central to the assessment, with the deficit and public debt projected at 7 percent and 59 percent of GDP in 2025, and debt projected to rise to 78 percent of GDP by 2031 under current policies. Staff recommended a cumulative fiscal adjustment of 4 percent of GDP and pointed to recent spending increases as the driver of the wider deficit, alongside suggestions to strengthen fiscal governance including establishing a well-resourced, independent fiscal council. With inflation back in the target range but services inflation elevated, staff advised a cautious, data-dependent approach to further easing. The banking sector was assessed as stable and well-capitalized, but staff urged steps to reduce frictions to credit provision, including further reform of the bank asset tax, redesign of the Long-Term Funding Ratio to avoid unintended credit-cost effects, and proportionate approaches to legal risks around mortgage contracts. Polish authorities consented to publication of the Staff Report, which the IMF indicated will be posted shortly.