The upgrade of Poland's rating is possible mainly in the case of an improvement in Poland's foreign debt ratios in relation to countries from the rating basket, as Arvind Ramakrishnan, chief analyst of Fitch rating agency Poland said. He added that some assumptions of the state budget for 2020 are a bit too optimistic.
“The external finance category is a driver for Poland's rating because, for this reason, we are currently downgrading Poland's rating by one level,” the analyst said.
As he pointed out, the balance of Poland's current account is "much lower" than the entities in the basket, which negatively affects Poland's rating.
According to Ramakrishnan, some of the assumptions of the Polish budget for 2020 are too optimistic and the agency would like to see more details related to some budget items.
“For example, it is quite obvious that the increase in CIT revenues will slow down considerably, and PIT will also go down. The government also expects that it will reduce the VAT gap even more. We are skeptical in this respect,” Fitch representative said.