Poland's Defence Spending Boom

Why Poland raised defence spending to around 4 percent of GDP after 2022, buying tanks, jets and artillery from the US and South Korea, and the economic trade-offs.

Poland sharply increased defence spending after Russia’s 2022 invasion of Ukraine.

Scale

Defence spending rose to over 4 percent of GDP in 2024, the highest share in NATO.
Plans aim for even higher levels.

Purchases

Tanks and artillery from South Korea (K2 tanks, K9 howitzers).
Abrams tanks, HIMARS rocket systems and F-35 jets from the US.

Why

Border with Russia’s Kaliningrad and Belarus.
History of invasions.
Supporting Ukraine.

Economic effects

Fiscal pressure: higher deficits.
Industrial opportunities: local production of some Korean equipment.
Investment in domestic defence firms.

Trade-off

Money spent on defence can’t be spent on health or education, the “guns versus butter” trade-off.

Comparison with India

India spends around 2 percent of GDP on defence.

The Korean tanks

Poland orders hundreds of South Korean tanks, with some to be assembled in Poland, creating local jobs.

Thinking defence spending has no economic effects

It affects deficits, industry and other spending.

Key takeaways

Poland's defence spending exceeded 4 percent of GDP in 2024.
It buys equipment from South Korea and the US.
Security threats drive the spending.
It creates fiscal pressure and industrial opportunities.