Poland issues €3bn in bonds to finance defence and pay off old debts
16 October 12:26on 15 October 2024, Poland returned to the international bond market by placing seven- and fifteen-year debt instruments worth EUR 3 billion. This step was taken amid growing funding needs arising from a sharp increase in the country’s debt obligations. This was reported by Bloomberg, according to Komersant Ukrainian
This is the third time this year that Warsaw has turned to the international market to raise funds, as it expects a significant increase in debt obligations in 2025. Poland’s public debt is approaching the limit set by the European Union, which is 60% of gross domestic product (GDP).
On Tuesday, the government placed €1.75 billion of bonds maturing in 2031 at yields 85 basis points above average swap rates and €1.25 billion maturing in 2039 at yields 140 basis points above average rates.
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The government led by Prime Minister Donald Tusk has proposed a budget for 2025 with large defence spending. These expenditures are driven by the need to strengthen the country’s defence capabilities and maintain public support ahead of next year’s presidential election.
Poland’s net borrowing needs are projected to rise to PLN 367 billion (approximately $93 billion) in 2025, up from almost PLN 216 billion in 2024. At the same time, the country’s budget deficit is likely to exceed the EU’s 3% of GDP target in the coming years.