Poland unveils massive transport, energy, defence plans under 2025 budget

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Polish Prime Minister Donald Tusk vowed to tackle inflation, drive record economic growth, and bolster key investments in energy and infrastructure when he unveiled the country’s 2025 budget on Friday, 30 August.

Tusk said his government has set a high bar for the budget. “We aim to keep inflation in check, ensure record economic growth, increase the minimum wage in real terms, and kickstart crucial investments, particularly in energy and rail infrastructure,” Tusk said.

Poland to spend big on defence, welfare, public salaries

The 2025 budget focused on national security, including an unprecedented increase in defence spending. “We have decided on record-high defence spending, close to PLB 190bn,” he said.

Polish Finance Minister Andrzej Domanski said defence spending will constitute 4.7% of gross domestic product, compared to 4.2% this year, which already put national defence spending well over the 2% NATO guideline.

The new Polish budget also increases health care funding. The Tusk-led centre-left coalition government plans to allocate PLN 222bn  (EUR 51.06bn) to health, up from PLN 191bn (EUR 43.93bn) in 2024.

The government predicts a 3.9% increase in economic growth in 2025, and said it will continue to back social programmes for the vulnerable and salary increases for civil servants.

The new budget includes provisions for the 800 Plus initiative, pay rises for teachers, and a 20% increase in salaries across the public sector. Recently, the government also approved salary hikes for social workers and plans to introduce a “grandmother allowance” in the autumn.

Funding and Regional Policy Minister Katarzyna Pelczynska-Nalecz announced an additional allocation of PLN 4.3bn (EUR 1bn) for housing in 2025, an annual increase of 50%.

She highlighted that social housing will be a priority, while the “0% Loan” programme will not receive funding under the new allocation.

The government anticipates a public finance sector deficit of 5.5% for 2025, with the combined debt of government and local government institutions projected to reach 59.8%.

New airport will be one of Europe’s largest

The Polish government approved high-speed rail routes as part of its ambitious USD 8bn Central Communication Port (CPK) megaproject aimed at enhancing connectivity between Warsaw and key regional hubs.

The high-speed rail routes will establish a 150km rail line connecting Warsaw to the CPK, with an extension to Lodz, south-west Poland.

The CPK will be one of Europe’s largest airports, with a capacity to handle over 30mn passengers annually. Located on a 40sqkm site on the outskirts of Warsaw, the airport is scheduled to open by 2032.

The project’s rail network aims to significantly cut travel times. The new “Lipno section” of the rail line will reduce the journey from Płock to Warsaw from over 2 hours to just 50 minutes.

Additionally, the travel time from Wloclawek to Warsaw will be shortened by an hour. The CPK airport–Lipno section will accommodate speeds of up to 350kmph.

In a statement, the project team outlined the strategic vision: “The CPK represents a transformative investment in Poland’s national transport system, seamlessly integrating air, rail, and road travel. As part of the CPK Programme, a central airport will be built between Warsaw and Lodz, complemented by a high-speed rail network. The airport will initially serve 34mn passengers per year, with plans for future expansion based on demand and growth projections.”

The overall Central Communication Port project has an estimated cost of around EUR 30bn. Tusk said: “The CPK programme represents a leap into modernity on multiple fronts. Firstly, the high-speed rail will connect Warsaw, Lodz, Poznan, and Wroclaw. Secondly, the central airport will enhance connectivity, along with the expansion of regional airports. Lastly, we aim to develop LOT Polish Airlines into a leading global carrier.”

USD 1.2bn for country’s first nuclear plant

Tusk also announced an investment of PLN 4.6bn (USD 1.2bn) from the 2025 budget to initiate the development of the nation’s first nuclear power plant (NPP), news agency Bloomberg wrote, which is aimed at diversifying Poland’s energy portfolio and curbing electricity costs.

Polish Finance Minister Andrzej Domanski, speaking in Olsztyn, north Poland, underlined the need for a balanced energy strategy. “Combining renewable energy sources with nuclear generation is essential to achieving more affordable electricity prices,” Domanski said.

The government’s vision for the nuclear plant is part of a comprehensive strategy to reduce reliance on fossil fuels.

The Polish government projects that approximately PLN 60bn will be required for the 2025-30 phase of the nuclear project. Additional funding is expected to come from the US, which will supply the technology for the plant.