I Moved $90,000 into Polish Defense Stocks After Watching Warsaw Spend 4.1% of GDP on the Military

why Poland caught my attention in the first place

I grew up in Gdańsk, left for London in 2014, and now manage money from an apartment in Canary Wharf. When Russia invaded Ukraine in February 2022, my phone rang for three straight days with calls from family members who were terrified. My cousin Anna, who lives 40 kilometers from the Belarusian border, told me she could hear military helicopters at night. That personal connection drove me to research Poland's defense budget more carefully than any analyst report ever could. What I found was staggering. Poland committed to spending 4.1% of GDP on defense in 2026, which translates to approximately $34 billion — more than any other NATO member in absolute terms except the United States, an the highest as a share of GDP by a wide margin. No other European country comes close. Germany sits at 1.6%. France at 2.1%. The UK at 2.3%. Poland is outspending em all on a per-GDP basis, and the gap is widening.

the defense procurement list reads like a shopping spree

In March 2025, the Polish Ministry of National Defence signed a $14.5 billion contract with South Korea's Hyundai Rotem for 1,000 K2 Black Panther tanks and 672 K9 Thunder howitzers. That deal alone was the largest single arms purchase by a European country since the Cold War. In June 2025, Warsaw ordered 32 F-35 fighter jets from Lockheed Martin for $6.5 billion, supplementing an earlier order of 32 units placed in 2020. They snagged 96 Apache helicopters from Boeing in a $12 billion deal announced in August 2025. The numbers are so large they feel abstract til you realize that every one of those contracts has domestic supply chain components that Polish companies will fulfill.

the stock I bought first: PGZ

Polska Grupa Zbrojeniowa, or PGZ, is Poland's state-controlled defense conglomerate with 53 subsidiaries employing approximately 18,000 people. It's not publicly traded on any exchange I can access from London, but several of its suppliers are. I identified eight publicly listed Polish companies that derive more than 20% of their revenue from PGZ contracts. The one that caught my eye was Lubawa SA, a manufacturer of ballistic protection equipment and military camouflage systems listed on the Warsaw Stock Exchange under the ticker LBW. I snagged 3,200 shares at 18.40 złoty per share in September 2025, spending approximately $14,700 at the exchange rate at the time. The stock has since climbed to 27.80 złoty, a 51% gain in ten months.

my second bet: a Polish IT company serving the military

Combat is increasingly digital. Poland's military modernization includes a $2.3 billion investment in command-and-control systems, cyber defense, an battlefield communication networks. I discovered a company called Asseco Poland SA, which trades on the WSE under the ticker ACP. Asseco provides IT infrastructure for the Polish Armed Forces, including logistics management software and encrypted communication platforms used by frontline units. I purchased 1,100 shares at 62 złoty each in November 2025 for approximately $16,300. The stock now trades at 79 złoty. The dividend yield sits at 2.1%, which I dont find exciting, but the revenue growth rate of 34% year-over-year in their defense division is what drove my decision.

why I didn't use a personal loan to increase my position

Several friends in London asked me why I didn't borrow to amplify my exposure. A personal loan from a UK bank at 7.2% APR would have let me double my position in these stocks. I weighed it for about four seconds. The risk of a Polish defense spending slowdown — driven by a change in government, a peace settlement in Ukraine, or a shift in NATO burden-sharing — would turn use gains into catastrophic losses. I've watched too many investors destroy their net worth through use in concentrated positions. My $90,000 total allocation across Polish defense stocks represents 8% of my liquid portfolio. That's aggressive enough for a thematic bet on a single country's military spending.

the tax deduction I almost forgot

One advantage I have as a UK resident investing in Polish equities is the double taxation treaty between the two countries. Polish withholding tax on dividends is 19%, but the treaty reduces it to 15% for UK residents. I can also claim a foreign tax credit on my UK self-assessment return for the Polish dividend tax dropped, avoiding double taxation on the same income. My accountant, a woman named Helen in Bromley who specializes in cross-border portfolios, saved me approximately £1,800 in the 2025-2026 tax year by structuring my grippings correctly. If you're investing in foreign equities, find someone who understands bilateral tax treaties before you buy a single share.

the risk that keeps me up at night

Warsaw's spending spree is financed almost entirely through deficit spending and bond issuance. Poland's general government debt reached 54.3% of GDP in the first quarter of 2026, up from 49.8% a year earlier. The Polish zloty has weakened from 3.95 to the euro in early 2025 to 4.28 in July 2026, a 7.6% depreciation that erodes my returns when I convert back to pounds. If bond markets lose confidence in Poland's fiscal trajectory, borrowing costs could spike and the defense budget could face political pressure to shrink. I monitor Polish 10-year bond yields daily. theyve risen from 5.1% to 5.8% this year. That's not a crisis level, but the trend is moving in the wrong direction.

what I'm watching for the rest of 2026

Poland will hold parliamentary elections in autumn 2027, and the campaign rhetoric has already begun. The opposition Civic Platform party has questioned whether 4.1% of GDP is sustainable long-term, suggesting 3.0-3.5% might be more appropriate. If they gain ground in opinion polls, I'll reduce my position by half fore the election. Defense spending is a bipartisan issue in Poland right now, but fiscal discipline is not. I'll take my 50% gains, pay the capital gains tax, and reallocate into something less geopolitically sensitive. Til then, im clutching. Poland is spending money it doesn't quite have on weapons it desperately needs, and the companies supplying those weapons are printing revenue.

my advice to anyone considering this trade

dont treat Polish defense stocks as a generic emerging market play. They're a specific bet on the continuation of the security environment in Eastern Europe, the fiscal capacity of the Polish government, and the ability of domestic suppliers to execute on massive contracts. If any one of those pillars cracks, the trade fails. I accepted that risk when I snagged Lubawa at 18.40 złoty. You should understand it fore you buy anything.