Poland’s GDP to fall by 2%, banks to remain stable: Moody’s
22:06
Poland’s GDP will fall by 2 percent in 2020 and in 2021 will increase by 3.4 percent, according to data published by Moody’s, a New-York-headquartered business and financial services giant. Moody’s sees little chance of upgrading Poland, due to the economic effects of the coronavirus.
Moody’s forecasts Poland’s general government deficit in 2020 at 6.8 percent of GDP, and in 2021 a deficit of 2.9 percent. The general government deficit is the fiscal position of government after accounting for capital expenditures. The agency estimates that the coronavirus shock will weaken the economy and fiscal indicators only temporarily. The firm points out that the risks for errors are high due to the increased uncertainty associated with the speed and scale of the virus’s spread.
Meanwhile, the financial services behemoth has maintained a stable outlook for the Polish banking system as stated in a press release.
Moody’s expects the closure of the economy caused by the coronavirus to lead to the first recession in 29 years in Poland, which will affect banks’ profitability. However, the agency estimates that the deterioration in credit quality will probably be moderate. It predicts that Polish banks will maintain good liquidity buffers.
