Moody's expects Poland's GDP to drop by 2 pct in 2020

Rating agency Moody's believes that Poland's economy will shrink by 2.0 percent in 2020 and grow by 3.4 percent in 2021, but sees very little chance for a rating upgrade.

Moody's also estimates that Poland's general government deficit will stand at 6.8 percent of GDP in 2020, and 2.9 percent in 2021.

According to the agency, a rating upgrade for Poland is unlikely in the current situation caused by the coronavirus pandemic.

In Moody's opinion, although it is very unlikely that in light of the economic and fiscal coronavirus implications, Poland's rating could find itself under pressure for an upgrade if the post-crisis fiscal consolidation resulted in a significant fall of the structural budget deficit, or if actions weakening the state's institutional framework were reversed. Structural reforms supporting potential growth would also be positive for credit rating, Moody's added.

Negative pressure on the A2 rating could be exerted by a significant deterioration of the fiscal position and the prospect of lower and changeable growth, the agency wrote, stating that the lack of progress in structural reforms would also be another negative factor.

On May 13, Moody's did not update Poland's credit rating. This means that it still stands at A2, with a stable outlook.