Fitch: Poland outlook stable

Fitch Ratings said it changed Poland's long-term foreign currency outlook to stable from positive and affirmed the rating at BBB+. The country ceiling rating of A is unchanged. The short-term rating is also affirmed at F2.

The outlook on the long-term local currency rating is stable.

At the same time, the agency downgraded Poland's long-term local currency rating to A from A+. This reflects heightened political uncertainty, which has worsened the balance of risks for public finances and is likely to delay the timetable for adoption of the euro.

Fitch said there has been a marked deterioration in Poland's public finances in recent years. Fitch expects the budget deficit to widen to 7.6% of GDP this year (on a European System of Accounts (ESA) basis, excluding open pension funds from the general government sector) up from 3.3% in 2000. Fitch also expects general government debt to reach 53% of GDP (ESA basis) at end-2004 up from 38% at end-2000.

The public debt-to-GDP ratio is now well above the BBB median of 42%. The current fiscal stance is neither sustainable nor consistent with a convergent path leading to the adoption of the euro, the agency said.

Fitch noted the positive trends of economic transition and real convergence are expected to continue to support Poland's ratings and over the medium-term will further enhance sovereign creditworthiness so long as there is fiscal consolidation. However, recent political and fiscal developments have made that more uncertain and pushed out the probable time horizon.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.