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The Warsaw Voice » Business » November 25, 2011
Business & Economy
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Poland’s Credit Rating Stable: KUKE
November 25, 2011   
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Despite international turbulence, Poland maintained its national credit rating of “A+ with a stable outlook” in the latest round of ratings from the country’s own Export Credit Insurance Corporation (KUKE).

KUKE has also updated its ratings of countries with which Polish companies do business.

The revision—made in October—comes on the heels of a spate of downgrades by leading international rating agencies, which have revised their credit ratings in response to the latest political and economic developments in countries such as Greece, Portugal and Italy.

KUKE upgraded the credit rating of only one country, Slovakia, from A- to A, in October. This follows an improved record of payments in trade with that country and the good performance of the Slovak economy, KUKE said.

KUKE downgraded the ratings of Malta (to BBB-), Italy (to A), Chile (A-), Albania (to B), and Belarus (to B+).

KUKE also expanded its list of countries subject to evaluation to include BRICS economies (Brazil, Russia, India, China and South Africa) as well as Singapore and Croatia. At the moment, the list covers 60 countries.

According to KUKE, there is a high risk that the European banking sector will weaken seriously, especially in Germany and France. This may translate into worse financing conditions for companies and consequently give rise to problems with the timely settlement of payments due to Polish exporters. At the same time, KUKE says investors have a growing confidence in countries outside the euro area, especially those with a stable position such as Switzerland, Sweden and the Czech Republic.

Twelve OECD countries have an “AAA stable” rating with KUKE. France and the U.S. are rated “AAA negative” because of a possible deterioration in these countries’ banking systems. Poland is graded “A +,” with 50 points for the assessment of its economy (on a scale of 0 to 100 points) and 79 points for the political situation (on a scale of 0 to 110 points).

“Poland’s economic rating will not improve significantly without structural reforms and meeting the Maastricht criteria set for countries seeking entry to the euro zone,” said KUKE President Zygmunt Kostkiewicz.

KUKE’s rating is based on a combination of economic and political grades. The political grade takes into account factors such as the stability and quality of government institutions and banks, in addition to social determinants such as potential public unrest, which could point to major economic tension, according to KUKE.

KUKE launched its rating system in July this year, aiming to offer an early warning system about a possible deterioration in the economic and political situation in a given country; this could mean an increased risk of insolvency for companies operating on that market.

“The main goal of the constant monitoring process by KUKE is to reduce the risk for our clients and help them avoid potential losses related to a deteriorated financial performance of their customers,” Kostkiewicz said.
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