Fiscal problems blamed for Polish debt ratings revision

Standard and Poor's rating agency announced on Monday that it had revised its outlook for Polish debt ratings to negative from stable, citing fiscal problems. It affirmed Poland's long-term foreign currency ratings at BBB+ and the short term ratings at A-2. "The outlook revision reflects a deterioration in domestic medium-term fiscal prospects, in view of increased financial pressures and political difficulties facing key fiscal reforms," said the agency. Debt held firm in the face of a prospective downgrade. The country's benchmark Par Brady bonds remained 0.75 points higher on the session at 94.75% of face value, but złoty traders witnessed a fall of 0.3%, to zł. 3.8450 to the dollar, following the news. Analysts reckon that the move was important, as it was the first hint of a downmove in ratings in an eastern european country nearing accession to the EU. Grzegorz Wojtowicz, of Central Bank, stated that S&P's debt outlook revision to negative was no surprise and should act as a warning against delaying much-needed fiscal reforms. (Reuters; Rzeczpospolita, p. B7; Gazeta Wyborcza, Gospodarka Supplement, p. 4) A.K.