Fitch affirms Poland's rating at 'A-' with stable outlook

Andrew Gombert/PAP/EPA/PAP/EPA

Fitch has upheld Poland’s long-term foreign currency rating at 'A-' with a stable outlook, the global ratings agency said in a statement on Friday evening.

According to Fitch, Poland's rating offsets a diversified economy, stable economic growth in recent years and a sound macroeconomic framework, against governance indicators and income levels lower than rated peers.

"The Stable Outlook reflects the Polish economy's solid growth prospects, with potential upside from the next generation EU (NGEU) funds when approved, and a faster than previously expected decline in the public deficit and debt levels as the economy recovers," the agency said.

According to Fitch, Poland's GDP will grow 3.9 percent on average in 2022-23.

"Strong consumer sentiment, drawdown of savings, and robust wage growth will fuel household spending (average growth of 4.2 percent year on year) while faster absorption of EU funds will propel investment growth to 5.2 percent year on year on average in 2022-23," the agency wrote in the report.

Fitch assumes that the approval of funds for Poland from the EU Recovery Plan will be delayed until the second half of 2022. According to the agency, a significant inflow of EU funds will therefore materialise only in 2023.

The agency also predicts that Poland's inflation is set to peak at 7.8 percent on average in 2022 pushing interest rates up to 4 percent.

Fitch last confirmed Poland's rating on August 27, 2021.

Among the three major rating agencies, Moody's gives Poland the highest rating, an 'A2.'

According to Fitch and S&P Global Ratings, Poland's rating is 'A-.' All three give Poland a “stable” outlook.

S&P will publish its new rating review for Poland on April 1, Moody's on April 29.