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Monday, June 17, 2024

S&P Global Ratings agency. Poland’s long-term foreign currency rating at “A-“

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The S&P Global Ratings agency confirmed Poland’s long-term foreign currency rating at the “A-” level, the Ministry of Finance informed. The rating outlook remained stable. “The fall in natural gas prices in Europe and a slight improvement in economic conditions indicate an easing of short-term macroeconomic threats for Poland,” it added.

As written in the information, the S&P rating agency on Friday evening announced its decision to maintain Poland’s rating at A-/A-2, respectively, for long- and short-term liabilities in foreign currency, and A/A-1, respectively, for long- and short-term liabilities in national currency. The agency lowered its growth forecast for Poland for 2023 to 0.9 percent, justifying it with the continuing economic effects of Russia’s aggression against Ukraine.

Mitigation of short-term risks

According to S&P, despite the spending pressure ahead of this year’s parliamentary elections and increased funding, the Polish government’s decision to discontinue some tax rate cuts related to energy prices likely to lead to a smaller deficit than the agency had projected, helping to stabilize the level public debt net at a reasonable level of 45 percent. GDP. At the same time – as written – a decline natural gas prices in Europe and a slight improvement in the economic situation indicate the easing of short-term macroeconomic threats for Poland. The Agency believes that a competitive, diversified economy, a strong external position and a good situation of public finances in Poland will help to minimize the negative risk associated with war in Ukraine.

Impact of the conflict in Ukraine

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According to S&P, an increase in Poland’s rating is possible if, after the effects of the conflict subside, Poland maintains economic growth and a good state of public finances. On the other hand, the rating could come under pressure if negative impact conflict in Ukraine larger and longer-lasting than currently expected, which would result in a significant economic slowdown in the medium term. In addition, a rating downgrade would be possible in the case of smaller transfers of funds from the EU as a result of political tensions between Poland and the EU authorities. Among the three largest rating agencies, Poland’s creditworthiness is rated the highest by Moody’s – at the “A2” level. Poland’s rating according to Fitch and S&P is “A-“, one level lower than Moody’s. The outlook for all ratings is stable.

Read also: Poland with the second highest inflation in the EU. New predictions

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