Poland's A2 rating supported by growth outlook - Moody's
December 11, 2013
Poland's A2/P-1 government bond rating is supported by "resilient" growth outlook and "affordable" debt, despite structural constraints that weigh on fiscal performance and its relatively weak, albeit improving, external finances, Moody's said in an annual update to the markets.
Moreover, growth in the economy is set to gather momentum in 2014 (+2.5%), driven by recovering domestic demand, which should in turn boost fiscal revenue and support the sovereign's consolidation strategy, the agency said.
Also supportive of the rating is the healthy, profitable and well-capitalized banking system and the government's ample access to financing from both foreign and domestic sources, along with its moderate and affordable debt burden.
The stable outlook on the sovereign rating reflects Poland's strong and proven track record of macroeconomic stability and resilience and the substantial progress on fiscal consolidation. Overall, Moody's believes the authorities remain committed to ensuring the sustainability of public finances, despite a currently weak, but recovering, macroeconomic environment.
Moody's would consider upgrading Poland's long-term sovereign rating if the government was able to eliminate the structural budget deficit and bring debt ratios downwards sustainably.
The rating agency's report is an annual update to the markets and does not constitute a rating action.