2025-09-19 22:48
publication
2025-09-19 22:48
Moody's agency decided to follow in the footsteps of Fitch and also reduced the perspective of Poland's credit rating. The consequence may be a reduction in the assessment of the Polish government's creditworthiness and an increase in the costs of servicing rapidly growing public debt.
– Moody's Ratings has changed the perspective of the Polish government from stable to negative today. At the same time, we maintained the Polish rating at A2 level – Moody's agency announced on Friday.
Two weeks ago, Fitch Ratings decided to take the same step, which also reduced the perspective of the Polish rating from stable to negative, so far the rating alone leaving unchanged. On November 7, a regular review of the Polish rating is to be announced by the S&P Agency.
– Our decision to change the perspective to a negative reflects A significantly weaker forecast of fiscal indicators and debt compared to our previous expectations. If the government is not able to meet the spending pressure and obstacles to increase income, it will mean weaker fiscal strength and the effectiveness of politics compared to our current assessment – the agency was written in a statement.
According to Moody's analysts, the main threats to the updated fiscal perspective and debt result from the impasse between the government and the president and from the probability of increasing government expenditure before the parliamentary elections in 2027 and further.
Moody's pointed to the risk of the government's inability to cope with pressure on the increase in expenses and the conflict between the government and the president. According to agency analysts, the government of Donald Tusk will probably increase expenses before the 2027 elections planned for 2027.
But the real source of Poland's fiscal problems are the growing public expenses resulting in permanently and excessively increased budget deficits, which in turn will lead to a rapid increase in public debt relations with GDP.
Moody's: We thought the debt would stop at 60% of GDP. We were wrong
Moody's forecasts much larger budget deficits of the sector of government and local government institutions and a delay in gradual fiscal consolidation from 2026 – This is contrary to our previous expectations, assuming the accelerated reduction of the budget deficit and stabilization of public debt below 60 percent. GDP until 2027 – it was written (emphasized from the editor).
– Our updated forecasts of the budget deficit sector of government and local government institutions, of 6.8 percent. GDP in 2025 and 6.6 percent GDP in 2026, reflects mainly expenses than before. These include: Increased pressure on social expenses due to the rapid aging of society, growing wages in the public sector, increased interest payments and persistent defense expenses at the level of about 5 percent. GDP – compared to about 4 percent GDP forecasted earlier in March 2024 – the agency was written.
– As a result, we expect that Polish public debt will be systematically growing, reaching about 65 percent. GDP in 2026 and exceeding 70 percent at the end of the 1920s. If the government is not able to meet spending pressure and obstacles to increase income, it will mean weaker fiscal force and the effectiveness of fiscal policy than we have assessed before – it was written.
Of the three largest rating agencies, Poland's creditworthiness is assessed by Moody's – at “A2”. Polish rating according to Fitch and S&P is “A-“, one level lower than Moody's.
KK/PAP
