Moody's warns constitutional crisis may impair investment climate

Poland is facing heightened political risk as a result of its constitutional crisis, triggered by a struggle over the appointment of Constitutional Court judges and by controversial new legislation that limits the Court’s powers. These developments may impair Poland’s attractiveness for foreign investors, said rating agency Moody's in a report. "The implications of the constitutional changes for the independence of the Polish judiciary, and therefore for Poland’s institutional strength, remain unclear at this juncture. However, the constitutional crisis and the associated rise in domestic political risk may affect Poland’s attractiveness for foreign investors," the report read. Moody's also said net portfolio inflows have progressively declined in recent months and posted a negative reading at the beginning of 2016. In January, Poland registered a net portfolio outflow of $3.1 billion. The January 2016 outflow is the second largest reading in the last 10 years, ranking second only to the outflow registered in October 2008 after the Lehman collapse.