Poland’s long-term rating in foreign currency was affirmed at the A- level with stable outlook by the rating agency Standard and Poor’s (S&P).
According to the agency, Poland will be able to weather most macroeconomic risks stemming from the Russia-Ukraine war over the coming two years due to a diversified economy, the flexibility of the labour and product markets and an educated workforce.
Among other favourable factors contributing to the rating, S&P mentioned Poland’s membership in the EU and Nato, a “relatively secure” energy supply outlook and “manageable public and private debt, access to ample non-debt-creating external funding including EU transfers, and relatively deep domestic capital markets.”
Poland could risk credit rating downgrade if the impact of the war in Ukraine became stronger or if transfers from the EU subsided, the agency said.
“The ratings could come under pressure if the ramifications of the conflict in Ukraine intensified and lasted longer than we expected, resulting in much weaker medium-term growth prospects,” according to the report.
“Ratings downside could also materialize in the event of a pronounced and protracted reduction in EU transfers to Poland, for example because of continuous political tensions between Poland and EU authorities,” the report also read.
But, S&P added, the rating could be upgraded once the effects of the Russia-Ukraine conflict subsided, Poland resumed its strong economic performance and the government’s fiscal performance proved stronger than the agency’s expectations.
Among the three major rating agencies, Moody’s offers Poland the highest rating, on the A2 level. According to Fitch and S&P, Poland’s rating is A-. All three give Poland a “stable” outlook. (PAP/Business World Magazine)
