18:43 6 September 2025
Fitch Cuts Poland’s Rating Outlook to Negative Amid Fiscal, Political Strains
Fitch Ratings affirmed Poland’s sovereign rating at “A-” but revised its outlook from stable to negative, citing deteriorating public finances and political tensions under President Karol Nawrocki. The agency warned that loose fiscal policy in 2024–2025 – averaging a 6.7 percent of GDP deficit – alongside the lack of a credible consolidation plan, poses risks ahead of the 2027 parliamentary elections.
Poland’s deficit climbed to 6.6 percent of GDP in 2024, driven by rising public wages, pensions, social programs, defense spending, and debt servicing costs. Fitch projects the deficit will stay above 6 percent for years, while debt servicing costs are set to rise to 7.2 percent of revenues by 2027, well above the “A” median. Nawrocki’s frequent vetoes and political polarization further limit space for reforms.
Still, Poland retains strong fundamentals: a large, diversified economy, resilient domestic demand, stable external position, and solid EU membership framework. Inflation has eased, with more rate cuts expected in 2025–2026, and foreign reserves are projected to reach $249 billion by year-end. Fitch stressed that EU fund absorption and fiscal reforms remain key to stabilizing the outlook.
(XYZ)
