There is a decision on Poland’s rating

The S&P rating agency announced the decision to maintain Poland’s rating at the level of A-/A-2 for long- and short-term liabilities in foreign currency, respectively, and A/A-1 for long- and short-term liabilities in domestic currency, respectively.

The stable rating outlook balances short-term risks related to reduced external demand and loose domestic fiscal policy, with still elevated inflation, moderate levels of fiscal and external debt, and prospects for improved relations between Poland and the EU.

In the agency’s assessment, negative pressure on the rating could occur due to the slower pace of disinflation than current expectations, as well as the weakening of: the credibility of monetary policy, external competitiveness and economic growth.

Downward pressure on the rating could also arise if Poland’s medium-term economic growth prospects weaken significantly, possibly with the recurrence of external shocks, including potentially due to the unpredictable effects of Russia’s war with Ukraine, or as a result of prolonged economic weakness in key trading partners.

An increase in Poland’s credit rating according to S&P could occur if the agency observed lasting improvement in the institutional area and governance, which would translate into a stable inflow of EU funds and foreign direct investments, which would support the country’s medium-term economic growth prospects. The higher rating could also result from an improvement in the fiscal balance well beyond the agency’s expectations.

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