Since 2014, when Russia seized Crimea and ignited a war in eastern Ukraine, the sense of security in Central and Eastern Europe has steadily eroded. NATO and the European Union responded by reinforcing their defence efforts, yet for Poland the situation grew even more fragile after 2020, when Belarus began orchestrating pressure and destabilisation along the Polish border. The real turning point came in February 2022 with Russia’s full-scale invasion of Ukraine. From that moment, the strategic landscape changed irreversibly, and Poland’s political elites came to see the strengthening of national defence capabilities as not merely a policy choice, but as an existential imperative.
Poland’s financial commitment is without precedent. Analysts estimate that between 2025 and 2035, the country will spend nearly 1.9 trillion PLN on defence, more than double the 825 billion spent in the previous decade. These outlays are not one-off investments: servicing equipment, training personnel, and securing spare parts will lock in high costs for years. Government plans foresee defence spending peaking at 4.8% of GDP in 2026, with levels remaining close to 4% thereafter almost twice as high as in 2022, when the share was only 2.2%. For comparison, this would make Poland the NATO member with the highest defence burden relative to GDP, even as the state budget is projected to run a deficit of 6.5% of GDP in 2026.
In the short run, such massive outlays will generate a strong demand impulse for the Polish economy, with sectors from construction to machine maintenance and logistics benefiting from new contracts. Yet the longer-term picture is more complex. Poland will eventually face a choice between raising additional revenues, through higher taxes or contributions, or reducing spending in other strategic areas such as healthcare, education, or the green energy transition. In the event of economic shocks or financial crises, the proverbial “black swans”, sustaining defence expenditure at nearly 4% of GDP could become a formidable challenge. This raises the fundamental question: what, in practice, are the consequences for Poland of maintaining defence spending at such extraordinary levels?
The economic effects of military expenditure are far from uniform. In highly developed economies, such spending can spill over into civilian sectors, driving innovation, dual-use technologies, and long-term competitiveness. Advanced industries and research systems make it easier to turn “guns” into “butter” as well security and prosperity reinforcing one another. In less developed economies, however, such diffusion is harder to achieve. Here, defence often competes directly with civilian needs, creating the classic trade-off: guns or butter. Poland, standing somewhere in between, faces uncertainty. Elevated military expenditure could stimulate innovation and growth, but it could also crowd out private investment and strain social priorities if the balance is not carefully managed.
A critical issue lies in the structure of Poland’s military expenditure. Today, around 60% of procurement flows abroad, bypassing domestic industry. This reliance on foreign suppliers was reinforced after 2022, when the urgency of war on NATO’s eastern flank left little choice but to buy ready-made solutions from allies. Such imports deliver immediate security gains but risk cementing technological dependency and slowing the development of local competencies. Over time, however, Poland aims to shift the balance: the government’s target is for at least half of defence spending to be realised domestically. Every złoty (the Polish currency) spent at home is not only a purchase of equipment but also an investment in industrial capabilities, universities, and the innovation ecosystem.
The labour market adds yet another layer of complexity to the debate over whether defence spending is an opportunity or a burden. Nothing, of course, compares to the devastation that a Russian invasion of Polish territory would bring. Yet even in peacetime, the economic trade-offs are significant. Poland today enjoys one of the lowest unemployment rates in the European Union – around 3.5%. At the same time, the government plans to expand the professional army to 300,000 soldiers. This expansion, combined with higher military expenditure, effectively means drawing workers away from the private sector or attracting them from abroad. The challenge is magnified by global competition: defence industries in the United States, Germany, or Scandinavia are already racing to hire engineers, IT specialists, and skilled technicians.
In the end, the impact of Poland’s record-high military expenditure will depend less on its size than on its design. If channelled into domestic industry, research, and dual-use technologies, it can become a driver of modernisation. If spent mainly abroad, it risks becoming a heavy burden with limited returns.
Radosław Zyzik
Dr., Associate Professor
Jesuit University Ignatianum in Kraków
Poland
Senior Adviser
Office of Expertise and Regulatory Impact Assessment
Chancellery of the Sejm
Poland
