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Fitch rating agency affirmed Poland’s credit rating

27.09.2019

  • On 27 September 2019 rating agency Fitch announced a decision about keeping Poland’s credit rating unchanged at the level of A-/F2 for long and short term liabilities, respectively, in foreign currency and A-/F1 for long and short term liabilities, respectively, in local currency.
  • Rating’s outlook remained at a stable level.

Fitch rating agency in its press release justifying the decision indicates strong macro fundamentals and well diversified economy, underpinned by sound economic policy framework and strong banking sector. Agency pointed that Poland reached cyclical peak, and in the years 2019 – 2021 real GDP growth in Poland will amount to 4.1%, 3.3% and 2.9%, respectively. Fitch forecasts general government deficit to GDP below 3% in the years 2020 – 2021 at the level of 2.3% and 1.9%, respectively. General government’s debt to GDP ratio in 2019 will amount to 50.5% and will be lower in the following years (on average 48.3% in 2020-21).

Rating prospects

According to the agency, Poland’s rating could be raised as a result of a reduction in net external debt to GDP towards countries with ‘A’ category or fiscal consolidation that will lead to a sustained decline in public debt to GDP. Additionally, rating could be higher as a result of GDP growth supporting faster income convergence towards countries with ‘A’ category. On the other hand, rating could be lowered in case of weaker commitment to adhering to the 3% of GDP EU deficit ceiling, failure to stabilise debt to GDP ratio in the medium term or weaker macro-economic policy framework, potentially resulting in lower GDP growth. Rating could be also lower if governance standards or the business climate will lead to an adverse impact on the economy.

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