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FITCH rating agency affirmed Poland’s credit rating

FITCH rating agency affirmed Poland’s credit rating

FITCH rating agency affirmed Poland’s credit rating

On 8 June 2018 rating agency Fitch announced a decision about keeping Poland's credit rating unchanged at the level of A-/F2 for long and short term liabilities respectively in foreign currency and A-/F1 for long and short term liabilities respectively in local currency. Rating's outlook remained at a stable level.

Fitch rating agency in its press release justifying the decision indicates strong macro fundamentals and well capitalised, liquid and profitable banking sector. Agency points to narrowing general government deficit, which amounted to 1.7% in 2017, and acc. to Fitch can be explained by i.a. improvement in tax collection. Agency presents also forecast for GDP growth in the years 2018 – 2019 of 4.4% and 3.4%, respectively, and public debt to GDP, which will amount to 49.3% in 2019.

According to the agency, Poland's rating could be raised as a result of continued reduction in net external debt to GDP or faster fiscal consolidation that leads to a sustained decline in public debt to GDP. Additionally, rating could be higher as a result of GDP growth supporting income convergence towards countries with "A" category. On the other hand, rating could be lowered in case of any signs of weakening relevance of 3% deficit limit, failure to stabilise debt-to-GDP ratio in the medium term or weaker macro-economic policy framework.

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