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The S&P Global Ratings agency has raised its forecast of Poland’s GDP growth in 2021

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The S&P Global Ratings agency increased the forecast of Poland’s GDP growth in 2021 to 5.1 percent from 4.5 percent, and for 2022 it lowered it to 5.3 percent from 5.4 percent. – according to the S&P report of September 27. The agency also changed its forecast for interest rates in Poland – currently it expects increases to take place at the beginning of 2022.

Out of the three largest rating agencies, Moody’s scores the highest for Poland’s creditworthiness – at the “A2” level. Poland’s rating according to Fitch and S&P is “A-“, one level lower than Moody’s. The prospects of all assessments are stable.

S&P agency forecasts

“We have revised our forecast of Polish GDP growth in 2021 to 5.1%, we leave the forecast for 2022 more or less unchanged at 5.3%. We expect private consumption to be the main driver of growth over the horizon of our forecast, supported by a strong labor market and loose fiscal policy. Moreover, spending under the Next Generation EU program and the Polish Deal will increase investments in the coming years, “the report wrote.

“Disruptions in supply chains will weigh on Polish industrial production and exports in the short term, albeit to a lesser extent than in other countries – thanks to a more diversified export profile and a smaller share in the automotive industry,” he added.

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In the June report, the S&P Global Ratings agency forecasted that in 2021 Poland’s GDP would increase by 4.5 percent, and in 2022 – by 5.4 percent.

Risk of epidemic restrictions

The authors of the report indicate that the low level of vaccination of the Polish population increases the risk of introducing epidemic restrictions during the next wave of COVID-19.

“Economic growth in Q2 surprised positively, and high-frequency indicators show a similarly strong Q3. Against the backdrop of the low coronavirus infection rate and easing restrictions, mobility and consumption remain solid. Nevertheless, progress in vaccination has slowed down – around 50% of the Polish population. is vaccinated – only 10 percentage points more than a quarter ago. This indicates that the level of vaccination has stabilized “- it was written.

“This increases the risk of further lockdowns if another wave of pandemics occurs in the winter months. However, the government has indicated that restrictions will be imposed locally if necessary. Combined with consumer and business adaptation, this should limit the impact of future COVID-19 waves on economic activity. “- added.

An increase in interest rates

The S&P Global Ratings agency has also changed its forecast for interest rates in Poland – it currently expects increases to take place in early 2022. In June, S&P analysts expected the first increases in mid-2022.

“Given the limited impact of the pandemic on the economic recovery and a prolonged period of inflation outside the upper band for deviations from the NBP target, we currently expect the central bank to raise interest rates earlier than assumed in our latest forecast – in early 2022.” – marked in the report.

“The rise in inflation in 2021 is partly the result of rising commodity prices in global markets and some temporary factors, but also of persistent factors. One is the tight labor market, and therefore strong wage pressures. The other is a generous policy. which will remain so at least until the elections in 2023. These factors will increase inflation in the coming years, “he added.

Among the main risk factors for the forecast, the authors of the report indicate delays in the implementation of investments planned under the National Reconstruction Plan.

“We still see delays in the implementation of the National Reconstruction Plan as the main risk to our forecast. Following the recent dispute between Poland and the EU over the judicial system, the likelihood of such a scenario has increased. However, we expect that a compromise with the EU will be reached in the next few months that will Moreover, the Polish government would be able to pre-finance capital expenditures through issues on the markets, if necessary, “it was written.


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