A N A LYS I S Defence Industry in Central Eastern Europe The Defence Sector in Poland Robert Smoleń 1. Introduction and Overview Poland is the NATO member with the highest spending(in relative terms) on defence, including armaments. These ex­penditures amounted to 4.2% of GDP in 2024 and 4.7% in 2025, i.e.,€37.18 billion 1 and€43.9 billion respectively. Of those, 67 to 75% came directly from the state budget and 25 to 33% from the Armed Forces Support Fund(Fundusz Wsparcia Sił Zbrojnych RP, FWSZ) – a special instrument which makes it possible to meet high defence spending tar­gets without all of the expenditure being counted against the main state budget deficit. The Fund is financed by debt (bonds or loans) managed by the state-owned Bank Gosp ­odarstwa Krajowego. Over the medium term(2025–35), these expendi ­tures are likely to amount to the accumulated sum of€447 billion(as compared to€194.12 billion – the equivalent for 2014–24). Out of this amount, more than€118 billion is ex ­pected to be channelled into new acquisitions and R&D, and more than€125 billion into maintenance. 2 In absolute terms Poland ranks as the 5th largest military spender among NATO member states, comparable to Italy and Canada, and substantially larger than Turkey. France’s spending is higher than Poland’s by approximately 70%, and Germany’s and the UK’s are higher by a factor of over two. At present about 45% to 50% of Poland’s total de ­fence expenditure is allocated to personnel(pay, pensions/ benefits, training) and operating costs(fuel, repairs, infra­structure). The majority – 50% to 55% – goes to the pur ­chase of weapons, equipment, and related investments. Since the outbreak of the war in 2022, Poland has been consistently making efforts to strengthen its own de­fence industry, funnel investments into this sector, and place orders in national companies. However, procurement is currently realised mainly from foreign companies able to guarantee the prompt de­livery of the high-quality armaments and equipment ur ­gently required to close numerous gaps in the Polish de ­fence systems. After the Russian aggression against Ukraine in 2022, the government of the then ruling right­wing Prawo i Sprawiedliwość party, PiS, hastily concluded several costly contracts on large volumes of arms. Con­tracts with the US included 366 Abrams tanks, 486 HI ­MARS rocket launchers, 32 F-35 airplanes, and 96 AH-64 1  The Euro/Polish zloty exchange rate usually fluctuates between 4.18 and 4.28 PLN to 1 EUR; in this paper the rate of 4.25 has been applied for ease of comparison. 2  See„Poland’s Investment in Defence. Military buildup and seeking efficiencies in working towards targets”, a report by Delloite, March 2025. The Defence Sector in Poland 1