A very important assessment of Poland according to the Fitch Agency

Fitch forecasts that the general government deficit of Poland will increase to 8.2% in 2020. GDP, in 2021 it will amount to 5.4 percent. GDP, and in 2022 it will decrease to 4 percent. GDP. Fitch agency confirmed on Friday the long-term rating of our country in foreign currency at “A-” with a stable outlook.

“The rating at the A- level reflects the diversified Polish economy, characterized by stable growth and a solid economic policy framework, combined with EU membership. This is counterbalanced by lower GDP per capita and relatively high (though decreasing) net foreign debt compared to other countries from the rating basket “- it was written in the release.

Fitch forecasts that the general government deficit of Poland will increase to 8.2% in 2020. GDP, in 2021 it will amount to 5.4 percent. GDP, and in 2022 it will decrease to 4%. GDP. In its forecasts, Fitch takes into account all the announced spending by the sector.

“Fitch’s forecasts reflect more optimistic estimates of economic growth as compared to the government’s estimates, as well as the expectation that the aid funds (intended by the government to counteract the effects of Covid-19 – PAP) will not be fully used” – wrote the commentary.

Fitch estimates that the debt of the general government sector at the end of 2020 will amount to 59.2 percent. and will stabilize at this level in 2021-2022.

In September, the Fitch agency lowered the GDP growth forecast for Poland in 2020 to -3.5 percent. from -3.2 percent In 2021, Fitch forecasts an increase of 4.5%, and in 2022 an increase of 3.3%.

“Fitch expects GDP to contract by 3.5% in 2020 before returning to growth of 4.5% in 2021 and 3.3% in 2022. Growth is expected investment will be solid in 2021 (5.8% in real terms, after an expected 4% drop in 2020) along with an increase in the absorption of EU funds, “the release reads.

“Private consumption will also rebound, although persistent uncertainty may make household sentiment more cautious than in recent years,” he added.

According to Fitch, the risk to growth is the possibility of imposing new sanitary restrictions if the number of people infected with the coronavirus increases.

According to Fitch, the recent disputes within the United Right’s dinner threaten the stability of the government, but early elections therefore seem unlikely.

“It seems that internal disputes over legislation threaten the stability of the ruling coalition of the United Right. The ruling Law and Justice party (PiS) is the largest party in the lower house of parliament (Sejm), but without its coalition partners it lacks a majority,” it was written.

“At this stage, early elections seem unlikely. Due to the high popularity of PiS, the formation of a government without this party seems unlikely, and thus the opposition’s pressure for new elections will be less. Fitch does not expect any significant changes in fiscal policy.” or macroeconomic issues due to persistent political uncertainty “- added.

In the agency’s assessment, the following factors – individually or collectively – may trigger positive actions on a rating:

– fiscal consolidation in the medium term, which will lead to a lasting decline in public debt in relation to GDP;
– sustained improvement in external finances, including net foreign debt burden;
– GDP growth, supporting a faster increase in the level of revenues towards the median of basket countries rated “A”,

Negative action against the Fitch rating may be taken if:

– there will be a sustained increase in public debt, e.g. due to the lack of consolidation of public finances in the medium term,
– there will be a deterioration in the standards of governance or the business climate, which would have a negative impact on the economy.

Among the three largest rating agencies, Moody’s scores the highest for Poland’s creditworthiness – at the “A2” level. Poland’s rating according to Fitch and S&P is “A-“, one level lower than Moody’s. All ratings are stable.

S&P will end the autumn round of reviews of Poland’s rating by major agencies.

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