Poland Got Rich and Now Comes the Hard Part
Record defense spending, a shrinking workforce, and EU funds running dry. All hitting the same budget at once.
Poland’s GDP crossed $1 trillion in 2025 and Marco Rubio responded by inviting Warsaw to the G20 summit Trump is hosting at Doral this December. Poland, a nation that was once trapped behind the Iron Curtain but now ranks among the world’s 20 largest economies, will be joining us to assume its rightful place in the G20, Rubio wrote.
Rightful. That word is doing a lot of heavy lifting.
A generation ago, Poles rationed sugar and flour. Per capita income was a fraction of the EU average. Now, on a PPP basis at least, it sits roughly level with Japan’s. That comparison deserves an asterisk the size of Warsaw, PPP is a cost-of-living adjustment, not a measure of national wealth, and nominal GDP still puts Japan comfortably ahead. But the trajectory is real: growth has averaged nearly double the European rate since Poland joined the bloc in 2004. No other post-communist economy comes close.
The story of how matters. Warsaw basically copy-pasted the institutional architecture of Western Europe: real courts, anti-monopoly enforcement, bank regulation tough enough to keep the oligarchs out. Russia and Ukraine let their economies get captured. Poland didn’t. Marcin Piątkowski of Kozminski University argues the whole thing worked because Poles had one unshakable consensus across the political spectrum: get into the EU. Left and right fought about everything else. The destination was never in question. That consensus is no longer what it was.
EU money helped, obviously. Billions in structural funds, both before and after accession. But here is where 2026 gets complicated. Recovery and Resilience Plan funding runs out this year. And Poland is no longer simply waiting for EU pipelines to dry up: President Nawrocki recently vetoed a bill that would have unlocked €43.7 billion in cheap EU defense loans, forcing the government into a legally untested workaround through the National Development Bank. The pipeline is going dry. Warsaw is also closing its own taps.
Because Poland’s most expensive project is just getting started.
Warsaw now outspends every NATO ally on defense as a share of GDP, including the United States. The 2026 budget puts 4.8% of GDP toward the military, with a target of 5%. F-35s, K2 tanks, Patriot batteries. When your neighbor is Ukraine, the logic writes itself. The bill, though, is something else entirely. And the question of who benefits from this buildup, Warsaw or Washington, is one that cheerful GDP charts tend to skip over.
The deficit hit 6.8% of GDP in 2025. Second largest in Europe, during a strong economy with a closed output gap. The IMF came through last year and said what everyone already knew: debt is heading for 69% of GDP by 2027 and close to 80% by 2031. Spending has surged since 2021. New social programs, public-sector raises, ballooning debt costs. Revenue barely moved. Structural gap. Not a blip.
And underneath all of it, the demographics.
Poland is losing workers. The Polish Economic Institute projects 2.1 million gone from the labor force by 2035. Warsaw’s own labor strategy admits foreign workers need to hit 12% of the workforce by 2030 just to keep the lights on. Ukrainians filled that gap after 2022, but surveys show most of the war refugees plan to go home. That is a lot of labor walking out the door with very little notice.
Polish officials love pointing to Solaris, the electric bus company out of Poznan. Fair enough. Founded by a guy who started fixing cars with West German spare parts under communism, now controls 15% of Europe’s electric bus market. Bet on batteries in 2011, years before the big Western manufacturers. A real success. But after three decades, Solaris is still one of very few Polish firms with anything resembling a global brand. The country builds components for other people’s supply chains. Getting higher on that value ladder remains more aspiration than reality.
So the G20 invitation lands at an odd moment. When The Economist ran Poland on its cover earlier this year, the tone was pure coronation: Europe’s new power, the continent’s growth engine, a miracle three decades in the making. That kind of coverage tends to arrive right when the cracks are forming. Poland’s transformation since 1989 is genuine, possibly the most impressive development story in modern European history. Young Poles are better educated than young Germans and earn half as much. Engineers are leaving Silicon Valley to come back to Poznan. Brain drain reversing. That part is remarkable and real.
But defense at 5% of GDP, a vanishing workforce, rising debt, expiring EU funds, and social spending that no coalition dares cut are all hitting the same budget at the same time. Growth of 3.6% looks healthy until you notice the deficit required to produce it would normally trigger enforcement proceedings from Brussels. And Euroskepticism, once a fringe position in Poland, now runs at roughly one in four citizens, with close to half of opposition voters favoring exit. Nobody campaigns on Polexit. Nobody needs to. A president with a veto pen and an opposition that treats every Brussels-adjacent initiative as a sovereignty violation produces the same result without a referendum: a country inside the bloc but unable to use its instruments.
Rubio called Poland’s seat at the table rightful. The economy earned it. The budget will determine whether Poland gets to keep it. And if the international press is any guide, the coronation coverage usually arrives just in time to mark the peak.
Sources:
US invites Poland to G20 summit
Polish economy grows 3.6% in 2025 - ING
Poland plans record defence spending 4.8% GDP
IMF 2025 Article IV Consultation - Poland