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The Warsaw Voice » Business » July 14, 2016
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Fitch expected to cut Poland's outlook, keep rating at 'A-'
July 14, 2016   
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Poland will likely suffer a credit rating outlook cut to 'negative,' mostly on fiscal concerns, while the 'A-' rating itself will be left intact by Fitch during the periodic rating review slated for Friday, most local analysts say.

Grounds for cutting outlook are to be found among factors endangering the 3% of GDP threshold for public finance sector deficit, Societe Generale economist Jaroslaw Janecki said.

These include lower GDP growth in Q1, potentially affecting FY growth, uncertainty on financial markets limiting investment processes and a higher probability of lowering retirement age in 2017.

Fitch's January decision to keep both the rating and the outlook unchanged was issued with caveat that fiscal policy, loss of economic credibility or growth slowdown could affect the rating in the future, Raiffeisen Polbank economist Marta Petka-Zagajewska said.

"We assess that the last five months showed an increase of risks in at least two of the indicated areas," she told PAP Polish news agency.

Expansive fiscal policy by the government combines with lower-than-expected receipts from new sector taxes and a delay in the effects of improved tax collection to 2018, Petka-Zagajewska said.

Still, the uncertain nature of many of the elements of future fiscal policy will prevent the agency from downgrading the rating itself, in her view.
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