Moody's cuts Poland's ratings on deteriorating fiscal strength
Credit ratings agency Moody’s downgraded Poland’s sovereign rating to “A3” from “A2” on Friday, citing sustained deterioration in the country’s fiscal strength. Poland continues to finance major defence, infrastructure and social spending programmes while maintaining some of the highest fiscal deficits in the European Union. “Large fiscal deficits have led to a material increase in the government…
Moody's Ratings Agency has lowered Poland's sovereign credit rating from "A2" to "A3" due to ongoing issues with the country's fiscal health. The downgrade comes as Poland continues to fund significant defense, infrastructure, and social spending programs despite having one of the highest fiscal deficits in the European Union. The agency cited a surge in the government debt burden and weaker debt affordability metrics as key factors leading to the downgrade.
Finance Minister Andrzej Domanski had previously forecasted a 7.1% deficit in 2027. However, Moody's has shifted Poland's outlook to "stable" from "negative", anticipating that the government will adhere to fiscal rules post-November 2027 elections, which will aid in stabilizing the debt burden later in the decade. Despite the downgrade, Poland's economy remains robust, with rapid growth and strong fundamentals.
However, the country continues to grapple with political discord between the pro-EU government and the conservative-nationalist President, Karol Nawrocki, who recently referred a windfall tax bill to the constitutional court.
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