After floods, Poland to boost natural disaster reserve in 2025 budget

WARSAW (Reuters) - Poland's 2025 draft budget will set aside 3.2 billion zlotys ($835.88 million) as a reserve for dealing with natural disasters, the government said on Saturday, after devastating floods wreaked havoc in the country.

The worst floods in at least two decades left many towns in southwestern Poland submerged in the last two weeks, and the government has said it will free up a total of 23 billion zlotys from the budget and European Union funds to deal with the aftermath.

The deluge has also compounded the financial worries of a government facing the prospect of EU budget discipline measures.

In a statement published after the government adopted the 2025 budget with changes due to the floods, it said that the reserve for counteracting and removing the effects of natural disasters would be increased by 2.194 billion zlotys and would now amount to 3.191 billion zlotys.

It said that around 20 billion zlotys of EU funds would be allocated to helping regions affected by the floods.

Finance Minister Andrzej Domanski said that no decision had yet been made on whether changes to the 2024 budget would be necessary, but reiterated that the floods made it more likely.

In August it announced that according to the assumptions of the 2025 budget, the general government deficit would rise to 5.5% of GDP. This would arise from increased defence spending and the dropping of some practices of the former administration that critics said kept costs off the books.

The state budget deficit will amount to 288.77 billion zlotys in 2025, the government said on Saturday.

The government also adopted the Public Finance Sector Debt Management Strategy for 2025–2028.

The ratio of general government debt to GDP will be 54.6% in 2024 and 58.4% in 2025. In 2026 it will rise above the EU cap of 60% of GDP. It will be 61.3% in 2027 and 61.2% in 2028.

($1 = 3.8283 zlotys)

(Reporting by Alan Charlish; editing by Mark Heinrich and Clelia Oziel)