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Moody’s rating agency affirmed Poland’s credit rating

19.04.2019

  • On 19 April 2019 rating agency Moody’s announced a decision about keeping Poland’s credit rating unchanged at the level of A2/P-1 for long and short term liabilities, respectively, in foreign currency, and A2/P-1 for long and short term liabilities, respectively, in local currency.
  • Rating’s outlook is stable.

Moody’s rating agency in its press release justifying the decision described Poland’s economy as resilient to economic slowdown seen globally, which is characterized by robust and stable growth. Agency’s analysts forecast GDP growth at the level of 4.4% in 2019 and 3.7% in 2020. The strength of polish rating, according to Moody’s, is also fiscal policy, especially stable level of public debt. Agency forecasts general government deficit to GDP below 3% in the years 2019 – 2020 at the level of 1.8% in 2019 and 2.6% in 2020.

Rating prospects

According to the agency, Poland’s rating could be raised if fiscal consolidation were to bring about a sustainable reduction in the structural budget deficit, or if measures were taken that would reverse the weakening of the institutional framework. Structural reforms that would support potential growth over the medium term would be also credit positive. Conversely, a material deterioration in the government’s fiscal position and/or the prospect of lower, more volatile growth perhaps as a consequence of a shock to the investment climate would generate downward pressure on the rating. Lack of progress with structural reforms that deter FDI and hence hamper growth in the context of adverse demographics and a decrease in EU funds would be also credit negative.

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