Moody's credit rating agency confirmed on Friday the long-term A2 abroad currency rating of Poland, maintaining a unchangeable outlook. This is the highest credit rating granted to Poland by 3 major agencies – Fitch and S&P measure the country at level A-.
Moody’s justification stressed that Poland remains a country with “high geopolitical vulnerability”, especially in the context of regional security. NATO membership and a crucial increase in state defence capacity are a mitigating factor.
The Agency besides noted that Poland's improved relations with the European Union after the change of government in December 2023 are key support for the credit assessment. Unlocking EU funds will increase investment between 2025 and 2028.
Economic growth versus debt
Moody’s assessment of strong growth prospects balances the risks arising from rising public debt and worsening its service. The Agency forecasts the GDP growth of Poland by 2.9% in 2024 and 4.0% in 2025, driven mainly by private consumption and investments.
At the same time, defence spending is expected to proceed to emergence to 4.7% of GDP, which will affect the advanced level of the budget deficit, although this is expected to fall somewhat to 5.8% of GDP in 2025. Moody’s assumes a gradual fiscal consolidation from 2026, which will stabilise government debt levels just above 60% of GDP by 2030.
What could change your rating?
The Agency points out that the rating of Poland could be raised if there was a crucial improvement in the safety situation in the region and a marked fall in geopolitical risk. The fast restoration of the independency of the judiciary and the implementation of reforms strengthening fiscal and economical foundations would besides benefit.
In turn, the force to lower the assessment would arise in the event of a deterioration of regional security, e.g. due to a weakening of US support, a faster increase in debt than presently anticipated or a deterioration of the regulation of law, which would harm Poland's attractiveness as a place to do business.
Although Moody’s considers the possible military attack on Poland to be a very low probability scenario, he points out that its effects would be serious – the rating would be immediately reduced by respective degrees.
Currently, Moody’s rating for Poland (A2) is higher than that given by Fitch and S&P (A-), although all 3 agencies consider the position to be stable. The A2 evaluation confirms that Poland, despite political and fiscal challenges, is inactive seen as a resilient economy with advanced growth possible and a crucial function in the region.
