'Polish cities are doing well in a pandemic situation': Fitch

Fitch Ratings has confirmed the ratings, i.e. the assessment of debt-servicing capacity, of 18 Polish cities. They managed to be maintained despite almost a year of functioning in pandemic conditions. Although the analysts also see the weaknesses of municipal budgets, they emphasize the flexibility of local government financial management, which helps them deal with the crisis. 2021 may still be a time to tighten their belts, but from next year the condition of city budgets should improve.

Fitch Ratings rates Poland's rating as "A-". It is the lowest rating in the "upper average" group and seventh in the top 10 investment ratings. This is important because the local government cannot receive a higher rating than that of Poland. Fitch assesses 18 cities in Poland - this group includes Katowice, Płock, Rybnik, Warsaw, Częstochowa, Gdańsk, Poznań, Białystok, Zabrze, Toruń, Bydgoszcz, Olsztyn, Rzeszów, Chorzów, Szczecin, Opole, Gliwice and Ostrów Wielkopolski. Seven municipalities have a rating of "A-" in Poland: these are Warsaw, Poznań, Gdańsk, Bydgoszcz, Gliwice and Katowice, five municipalities have slightly lower ratings of "BBB +" (Płock, Częstochowa, Rybnik, Ostrów Wielkopolski and Rzeszów), and three communes are rated "BBB": these are Białystok, Olsztyn and Toruń. The ratings of Chorzów and Opole are "BBB-", while Zabrze is "BB +". All city ratings have a stable outlook, except for Płock, which has a positive rating.

"In our opinion, cities still have a safety margin, which allowed them to maintain a stable rating despite economic disruptions caused by the pandemic," Maurycy Michalski, an analyst at the Public Finance Team, Fitch Ratings, said.

According to Dorota Dziedzic, director of the Public Finance Team in Poland, Fitch Ratings, liquidity in the municipalities sector did not deteriorate significantly last year, at least in those municipalities assessed by Fitch Ratings.

(Newseria)