Fitch confirms Poland's rating at "A-" with stable outlook

Andrew Gombert/PAP/EPA

Fitch confirmed on Friday evening the long-term rating of Poland in foreign currency at "A-" with a stable outlook, the agency said.

"Rating at the A- level balances a diversified economy, developing at a record-long steady pace in recent years, a solid monetary policy and macroeconomic frameworks against - in comparison to countries in the A-rating basket - a lower level of GDP per capita and high, albeit declining, debt external net," Fitch Ratings said in a statement.

"The stable outlook for the rating reflects Poland's resilience to the pandemic shock and the agency's expectations that GDP growth will rebound and the budget deficit will decline this year, while (it also observes) a significant increase in government debt in 2020 and persistent negative risk factors related to the development of the pandemic," the rating agency also said.

Fitch forecasts that the general government deficit in Poland will amount to 5.7% in 2021 of GDP (January forecasts of the agency: 4.9% deficit) and 3.7% in 2022 (3.1% deficit previously).

In its estimates, the agency takes into account the expenses related to the Covid-19 Response Fund run by the state bank BGK and spending connected with the also state-run Polish Development Fund's (PFR) programme aimed at counteracting the negative effects of the pandemic.

The forecast path of the deficit includes, among others, budget revenues growing due to the dynamics of an economic growth, revenues from the OFE open pension fund transformation fee in 2022 and the expiry of government aid programmes in 2021.

S&P Global Ratings is scheduled to analyse its rating for Poland ("A-") on April 2, while Moody's ("A2") will do the same on April 30.