Rating agencies concerned about the situation in Poland. They pointed to the main problem

In the coming months, the three largest rating agencies in the world will again take a closer look at Poland. They will assess the credibility and solvency of our country, prompting, inter alia, foreign investors, is it worth investing with us?

Already, two agencies (Fitch and Moody’s) have clearly indicated what they will mainly pay attention to. They admit that A further conflict on the Warsaw-Brussels line may be a significant problem in the context of granting EU funds, which are still blocked.

“The most important factor from the point of view rating of sovereign Poland are currently not fiscal issues, but relations with the European Union, incl the date of starting the use of new EU funds“- we read in a statement from the Fitch agency, quoted by ISBnews.

See also: Money. It counts

Fitch is not talking openly about the consequences for Poland’s rating. The situation is different with the Moody’s agency, which is already signaling more clearly that the threat of a suspension of funds will be negative for the rating.

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Fitch on Poland’s problems with the EU

– Generally speaking, relations with the EU come first. (…) It is not at all the baseline scenario that Poland will leave the EU, but it is important to consider the impact of these low-probability scenarios, the analyst points out. Fitch Arvind Ramakrishnan.

– If Next Generation Funds do not arrive even this year (not a Fitch baseline) but are delayed until next year or, potentially, even longer, Poland will have to rethink its budget, your plans for catching up on your investments. And more broadly – what it means for the rule of law – is enumerated by Ramakrishnan.

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Fitch estimates that the deficit of the general government sector in Poland in 2021 amounted to 4.3%. GDP r. I forecasts a decrease of this ratio to 3.1%. GDP this year. If everything goes well for the agency, there is a chance for a further reduction of the deficit to 2.7%. in 2023.

When we add up the deficits of previous years and add up the debt of the central and local government sector, it should amount to about 55.8 percent in 2021. GDP. Fitch estimates that in 2022 the debt will drop to 53.8 percent., and in 2023 to 53.2 percent.

The rating agencies are shaking their finger at us

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The second thing concerns weakening of public finances in Poland, which since the pandemic crisis have fallen into “the unlikely prospect of a full recovery of the debt increase in the medium term”.

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