S&P Global Ratings affirms Poland at 'A-'; outlook stable
S&P Global Ratings has affirmed Poland's long-term foreign currency rating at ‘A-’ with a stable outlook, the agency said in a release.
"The stable outlook reflects the balance between Poland's favorable medium-term growth prospects against the near-term risks it faces from elevated fiscal deficits and rapidly rising debt, amid increasing external risks to its economy," reports S&P.
The agency could raise the ratings if a sustained track record of institutional and governance improvements helps preserve the flow of EU funds and net foreign direct investment (FDI), supporting Poland's medium-term growth prospects.
"We could lower the ratings if debt increased beyond our projections, which could indicate a more permanent deterioration in fiscal policy management," it pointed out.
"We could also lower the ratings if Poland's medium-term growth prospects deteriorated significantly, possibly coupled with renewed external shocks, including unexpected spillovers from, and reduced confidence linked to, the Russia-Ukraine war," it added.
The rating agency expects Poland's general government deficit to decrease gradually, to 4.2 percent of GDP by 2027 from 5.7 percent in 2024.
"Our deficit forecast is higher than the government's because we think the electoral calendar, a polarized domestic political landscape, and substantial increases in military spending will curb more vigorous actions to reign in the currently very high deficits," it wrote.
"We therefore project net general government debt, albeit still comparably moderate, to rise by almost 10 percentage points to 58.8 percent of GDP by 2027," it added.
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