- The fact that S&P has maintained its rating of Poland at the current level with a stable outlook is another signal which shows that the economic policy and anti-crisis measures conducted by the government before the outbreak of the pandemic are bearing fruit," assessed Finance Minister Tadeusz Kościński in his announcement on Friday.
"S&P has announced its decision to keep the rating of our domestic and foreign currency liabilities unchanged. The agency underlines that we have a well-diversified economy, qualified staff, a secure level of public and private debt and a prudent monetary policy with a stable banking system. This is another signal which shows that our economic policy and our anti-crisis measures before the outbreak of the pandemic are bearing fruit'. - said Kościński, quoted in the communication.
S&P announced on Friday its decision to maintain the rating of Poland at A-/A-2 for long and short-term foreign currency liabilities and A/A-1 for long and short-term domestic currency liabilities respectively.
The lowest drop in GDP in the EU
According to S&P, the pandemic will have a negative impact on the economy - the agency forecasts a fall in real GDP of 3.4% in 2020. At the same time, S&P indicates that this will be the lowest drop in the EU as a whole, thanks to a relatively diversified and competitive export base, less dependent on the automotive sector and tourism, as well as the application of significant measures under extraordinary policies to mitigate the negative effects of the coronavirus pandemic'. - is written in the communication.
According to the Finance Ministry, in the Agency's view, the fiscal measures taken in response to the crisis, which are among the highest in the CEE region, combined with action at EU level and standard EU transfers, supported by domestic demand and recovery in the euro area, can contribute to further economic growth, which S&P forecasts for 4.5% in 2021 and 3.6% in 2022.
"According to the Agency's estimates, the general government deficit will be in 2020. 9.3% of GDP in 2020, below official government forecasts (12% of GDP). The agency predicts that the general government net debt will increase to 58.7% of GDP at the end of 2021, after which it will stabilise," the ministry's announcement reads.
The Ministry of Finance informs that, according to S&P, the increase of Poland's rating is possible if, after a temporary shock, economic growth returns to the path of growth without creating fiscal imbalances. On the other hand, the rating could be downgraded if the impact of the pandemic seriously weakens the economic recovery and medium-term growth forecasts, leading to a significant deterioration of the fiscal position below the Agency's forecasts. The rating could also be downgraded in the event of significantly lower transfers of Union funds, the realisation of potential liabilities or an increase in the role of the state in the financial system.