The Fitch Ratings agency confirmed Poland’s long-term foreign currency rating at ‘A-’ with a stable outlook on Friday evening, the agency reported in a statement.
“Poland’s rating is supported by a diversified and resilient economy, quite solid macroeconomic framework anchored in EU membership, solid external finances, and a higher and more stable government revenue base than in other countries in the rating basket. The above factors are balanced by lower income levels and governance indicators, and a larger fiscal deficit,” the statement reads.
Factors that, individually or collectively, could lead to negative action/downgrading of the rating:
Public finances: a sharp increase in the debt of the government and local government institutions in relation to GDP in the medium term, for example, due to the non-implementation of a fiscal consolidation strategy that would sufficiently reduce the primary deficit.
Macro and external finances: significantly lower growth in the medium term and a persistent deterioration in the state of external finances, for example, due to a decrease in competitiveness and/or high inflation.
Factors that, individually or collectively, could lead to positive action/rating upgrade:
Public finances: fiscal consolidation in the medium term, leading to a significant decrease in the public debt-to-GDP ratio.
Structural: significant improvement in governance indicators, which may reflect an improvement in political frameworks and the rule of law.
Macro: sustained higher GDP growth, leading to faster income convergence to the median of ‘A’ category countries, supported by a policy that does not lead to macroeconomic, fiscal, or external imbalance.
Among the three largest rating agencies, Moody’s rates Poland’s creditworthiness the highest, at the ‘A2’ level. Poland’s credit ratings by Fitch and S&P are one level lower than Moody’s.
Factors that, individually or collectively, could lead to negative action/downgrading of the rating:
Public finances: a sharp increase in the debt of the government and local government institutions in relation to GDP in the medium term, for example, due to the non-implementation of a fiscal consolidation strategy that would sufficiently reduce the primary deficit.
Macro and external finances: significantly lower growth in the medium term and a persistent deterioration in the state of external finances, for example, due to a decrease in competitiveness and/or high inflation.
Factors that, individually or collectively, could lead to positive action/rating upgrade:
Public finances: fiscal consolidation in the medium term, leading to a significant decrease in the public debt-to-GDP ratio.
Structural: significant improvement in governance indicators, which may reflect an improvement in political frameworks and the rule of law.
Macro: sustained higher GDP growth, leading to faster income convergence to the median of ‘A’ category countries, supported by a policy that does not lead to macroeconomic, fiscal, or external imbalance.
Among the three largest rating agencies, Moody’s rates Poland’s creditworthiness the highest, at the ‘A2’ level. Poland’s credit ratings by Fitch and S&P are one level lower than Moody’s.
