“The stable outlook reflects a balance between Poland's stable medium-term economic growth prospects over the next two years against the risk of increasing the country's economic vulnerability related to rapidly growing debt,” S&P reports.
Earlier this year, Poland's rating outlook was downgraded to negative by two other major agencies: Moody's and Fitch, which maintained their credit rating at the current level.
S&P reports that Poland's credit rating could be downgraded if medium-term economic growth prospects deteriorate significantly, perhaps combined with growing macroeconomic imbalances or further external shocks, including the unexpected effects of Russia's aggression against Ukraine. A rating cut would also be possible in the event of an escalation of the war in Ukraine, which would weigh more heavily on Polish public finances and economic growth and would pose additional risks to the country's security.
An upgrade in Poland's credit rating would be possible if fiscal deficits were reduced to significantly lower levels, which would put the government's debt levels on a downward path. Maintaining the trend of improving the institutional quality of the state and governance, ensuring reasonable fiscal policy and maintaining the inflow of EU funds or foreign direct investments would also be positive for the rating.
S&P forecasts Poland's GDP growth in 2025 at 3.3%. (3.4 percent according to the latest NBP projection) and 3.2 percent. in 2026 (NBP: 3.7%).
The agency expects that EU funds will be key to maintaining Poland's economic growth in 2026, which will come from the KPO, the multiannual financial framework and the SAFE instrument.
“Poland's economic resilience underpins our forecast of average annual growth of 3% in 2025-2028. In terms of GDP per capita, it places the country well above the global median for the developed economies whose creditworthiness we assess. We believe that Poland's economic diversification, combined with the significant size of the market, mitigates the negative external factors in the current situation. Additionally, the strength of the services sector alleviates the ambiguous picture of the situation in the export-oriented industrial sector in which Poland is resisting,” says S&P.
“Poland is less exposed to the effects of the crisis in the automotive industry than other countries in Central and Eastern Europe. Therefore, supply chain integration with the stagnant and heavily automotive-dependent German economy, which is also impacted by higher tariffs imposed on EU goods by the United States, will likely have a smaller impact on Poland's economic growth. Nevertheless, the continued weak economic situation in Germany and other key European countries may further weaken growth in Poland, especially after the strong investment impulse resulting from EU financing has been exhausted,” it added.
The agency estimates that the economic impact on Poland so far related to Russia's hybrid threats to NATO and the country has been limited, which was supported by domestic consumption. According to S&P, the security situation has a greater impact on Poland's public finances, which is reflected in fiscal assessments.
“Although more difficult to quantify, geopolitical risks may also influence investor perceptions, especially in terms of attracting new players to the region,” it added.
If the agency observed a trend of further escalation of Russia's aggression against Ukraine, which could affect Polish territory, for example through a significant concentration of armed forces or confrontations increasing the risk of serious errors in assessment of the situation, this could significantly affect Poland's credit ratings in many dimensions, although S&P considers such a scenario unlikely.
