• On 17 February 2023 rating agency S&P announced a decision about keeping Poland’s credit rating unchanged at the level of A-/A-2 for long and short term liabilities, respectively, in foreign currency, and A/A-1 for long and short term liabilities, respectively, in local currency.
• Rating’s outlook is stable.

Economic repercussions of the Russia-Ukraine war will continue to weigh on Poland in 2023, prompting us to project a deceleration in real GDP growth to 0.9%. Despite spending pressure ahead of this year's parliamentary elections and elevated funding costs, the Polish government's decision to discontinue some energy price-related tax rate cuts will likely result in narrower 2023 fiscal deficits than previously projected, helping net general government debt stabilize around a manageable 45% of GDP. At the same time, a decline in European natural gas prices and modest improvements in the external environment suggest short-term macroeconomic risks for Poland have eased.

According to S&P, Poland’s competitive and diversified economy, as well as strong external and public balance sheets, will help mitigate the downside risks the war presents.

Rating prospects

According to the agency, Poland’s rating could be raised if, once the effects of the conflict subside, Poland continued its strong economic performance and fiscal performance. On the other hand, Poland’s rating could come under pressure if the negative impact of the conflict in Ukraine were larger and more protracted than currently expect, resulting in a much weaker medium-term growth outlook. Ratings downside could also materialize in the event of weaker EU transfers to Poland as a result of continuous political tensions between Poland and EU authorities.