• On 18 September 2026 rating agency Moody’s announced a decision to downgrade Poland’s credit rating to A3 from A2. The short-term issuer rating was downgraded to Prime-2 (P-2) from P-1.
• The outlook was changed to stable from negative.

According to Moody’s, the downgrade reflects expectations of a sustained deterioration in Poland’s fiscal strength. Large fiscal deficits and rising interest costs are expected to lead to a material increase in public debt and weaken debt affordability metrics.

Moody’s expects the general government deficit to remain elevated at around 7% of GDP in both 2026 and 2027, despite strong economic growth. High defense expenditure, rising healthcare costs, sustained public investment and ongoing social spending commitments will constrain deficit reduction.

The agency forecasts general government debt to increase to 68.9% of GDP in 2027 from 59.7% in 2025. Moody’s also assesses that fiscal policy effectiveness has weakened, reflecting the continuation of expansionary fiscal policy despite favorable economic conditions and limited willingness or ability to rebuild fiscal buffers. According to the Agency’s assesment, political constraints and the proximity of the November 2027 parliamentary election will also limit the scope for meaningful fiscal consolidation.

Moody’s points to a diminished effectiveness of Poland’s national fiscal framework, as a growing share of debt accumulation has occurred outside the scope of the national debt rule. At the same time, Poland continues to benefit from a comparatively strong rules-based fiscal framework, including a prudential debt threshold of 55% of GDP and a constitutional debt limit of 60% of GDP under the national definition.

The stable outlook reflects balanced risks at the A3 rating level. Geopolitical risks remain elevated due to Poland’s exposure to security risks stemming from Russia’s ongoing war against Ukraine. These risks are mitigated by Poland’s NATO membership, the presence of NATO and additional US forces and ongoing efforts to strengthen defense capabilities.

Moody’s expects robust economic growth, forecasting real GDP growth of 3.7% in 2026 and 3.2% in 2027, after 3.6% in 2025. The agency expects the authorities to comply ultimately with Poland’s fiscal rules, leading to faster consolidation after the November 2027 election and stabilizing the debt burden at 70%-75% of GDP in the late 2020s.

Rating prospects

Moody’s points out that a revision of the outlook to stable would be supported by a sustained, material downward trend in the public debt burden, resulting from a decisive shift toward credible fiscal consolidation over multiple years.

As the Agency notes, a downgrade could occur if Poland failed to comply with its fiscal rules, or if these rules were materially changed, combined with a fiscal policy stance that causes public debt to rise materially above 75% of GDP over the medium term. A material economic shock or significant deterioration in regional security would also put downward pressure on Poland’s ratings.