Poland 'A-/A-2' ratings affirmed by S&P

On April 1, 2022, S&P Global Ratings affirmed its 'A-/A-2' long- and short-term foreign currency ratings and 'A/A-1' local currency long- and short-term sovereign credit ratings on Poland. The outlook is stable which reflects the balance between macroeconomic risks stemming from the Russia-Ukraine conflict and the buffers provided by the country's strong external and government balance sheets.

The ratings could come under pressure if the negative impact of the conflict in Ukraine were larger and more protracted than we currently expect, resulting in a much weaker medium-term growth outlook. Rating downside could also materialize in the event of weaker EU transfers to Poland as a result of continuous political tensions between Poland and EU authorities, for example.

“We expect Poland's GDP to expand by 3.6% in 2022 and 3.1% in 2023. The conflict's key effect on Poland's economy will be predominantly via weaker growth in the EU, higher commodity prices, and weaker business and consumer confidence. Tensions with the EU have subsided over the past month and we think a compromise to release the EU's Recovery and Resilience Facility (RRF) funds is now more likely. Despite Poland's proximity to the military conflict in Ukraine, we think it will contain the direct economic effect thanks to limited trade links: Goods exports to Russia, Ukraine, and Belarus together only represented about 6% of goods exports before the pandemic. However, Poland's growth outlook will inevitably suffer for several reasons,” S&P Ratings stated.

(WBJ)