Polish economy has solid foundation – US credit rating agency

Justin Lane/PAP/EPA

Poland’s finance minister has welcomed a positive report on the Polish economy by ratings agency S&P.

The analysis looked at Poland’s short- and long-term economic perspective, and the effects of the pandemic on the economy.

"The report by the S&P agency draws attention to the solid foundations of the Polish economy," Tadeusz Kościński wrote in a commentary attached to the report. "The agency drew attention to the fact that, among others, a diversified and competitive economy was supported by human capital, a safe level of public debt and a prudent monetary policy."

S&P put its current rating of Poland at A-/A-2 for long- and short-term liabilities in foreign currency, respectively, and A/A-1 for long- and short-term liabilities in domestic currency, respectively. The rating's outlook is stable.

According to the finance minister, the agency also valued Poland's efforts to counter the economic effects of the pandemic, thanks to which it was possible to minimise the number of businesses that had to close, and to help maintain jobs.

S&P wrote: "The negative effects of the Covid-19 pandemic interrupted an extended period of economic growth in Poland, and the annual GDP fell by 2.7 percent in 2020. Nevertheless, Poland's economic results once again proved to be more resistant to the unfavourable environment than expected."

The report also noted that the decline in production in Poland was one of the mildest among countries with a comparable rating.

"This can be explained by Poland's relatively diversified and competitive export base… and significant stimulus from the crisis policy to mitigate the effects of the pandemic," it added.

The finance ministry stated that in 2021, S&P expects an economic recovery in Poland of 3.4 percent of GDP (against 3.8 percent growth in an earlier forecast), which will lead to an improvement in the country’s fiscal position.

In 2022, S&P expects GDP growth to accelerate to 4.4 percent (against an earlier 4.2 percent forecast) due to an increase in domestic demand, significant EU subsidies and a rebound in Europe.