Poland's credit rating could slide says Fitch analyst

Poland could follow other CEE countries and see its credit rating "slightly tilted to the downside" due to numerous economic challenges, Federico Barriga Salazar, the Fitch rating agency’s lead analyst for Poland, told PAP.

While "Poland's stable outlook means that we see little room to change the ratings in the near term... obviously there are downside risks, because of many external and domestic economic challenges," Salazar said.

"We have to see in the next couple of reviews how the government manages many of the present risks and if they are mismanaged then there could be pressure on the negative side of the rating."

"The positive rating sensitivity is really harder to trigger, because we would have to see very steep reduction of public debt, which we don't really forecast," he said. Another factor would be "stronger medium-term growth convergence" but "at this point we don't really see that yet."

The balance of risks is thus tilted to the downside but still, Poland positively stands out among its CEE peers, the analyst added.

"All in all, risks for the ratings are slightly tilted to the downside but that's also true across the region," Salazar said. "We've got six negative outlooks on sovereigns in CEE, so there is some consistency in the risks that the region faces. In this environment Poland's stable outlook can be seen as a really good outcome."

Fitch expects Poland to generate a higher general government deficit, 5 percent of GDP in 2023, rather than the 4.4 percent assumed by the government, largely due to possibly higher spending in the election year.