According to the agency, the COVID-19 pandemic will cause Poland's economy to shrink by 3.4 percent in 2020. Public finances will be burdened with a considerable fiscal impulse and spending pressure. At the same time, a strong economic upturn in 2021 supported by EU financing and accompanied by efforts aimed at fiscal consolidation should keep the general government deficit below 60 percent of GDP.
The agency has affirmed keeping Poland's credit rating unchanged at the level of A-/A-2 for long and short term liabilities, respectively, in foreign currency, and A/A-1 for long and short term liabilities, respectively, in local currency, with a stable outlook.
S&P believes that the general government deficit will amount to 59.9 percent of GDP in 2020, and that it will grow to 62.1 percent in 2021.
Negative pressure on the rating could appear, according to S&P, if the impact of the pandemic weakened both the economic upturn and medium-term growth prospects, leading to a worsening of the state's fiscal position, and if inflows of EU funds were smaller due to tensions between Poland and the EU.
S&P could upgrade the rating if, after a temporary shock, the Polish economy returns to strong growth without external imbalance.
From among the three largest rating agencies, Poland's credit rating has been best evaluated by Moody's (at A2). According to Fitch and S&P, Poland's rating stands at A-, with stable outlook from the three agencies.
Poland's Finance Minister Tadeusz Koscinski said that S&P's decision to maintain Poland's rating at the unchanged level, with stable outlook, "is another signal, which shows that the economic policy conducted by the government before the outbreak of the pandemic, as well as anti-crisis actions have been bringing results."
"(...) The agency underlined that Poland's economy is well diversified, that we have well-qualified staff, a safe level of the public and private debt, and a wise monetary policy with a stable banking sector," Minister Koscinski was quoted as saying in a Finance Ministry communique. (PAP)