Moody's maintains Baa1 rating for Poland despite economic difficulties

In its latest quarterly report, ratings agency Moody's has maintained Poland's Baa1 rating, despite new problems with the economy. The report's author, Moody's Investors Service vice president Jonathan R. Schiffer, says that currently the Polish economy is characterized by slow growth, declining demand, stagnation in structural reform, and rapidly falling inflation in the face of high real interest rates. "Fiscal problems, weakening economic growth and high unemployment levels have caused tension between coalition members in the new government and the Monetary Policy Council (RPP)," Schiffer commented. Despite the problems, Moody's decided to keep the same rating for Poland, in view of the mid-term economic growth forecasts and the advantages stemming from Poland's application for European Union (EU) membership. The report does, however, emphasize a need for reforms on the labor market and in the public sector. (Gazeta Wyborcza, p. 23; Prawo i Gospodarka, p. 2) M.T.K.