Moody's cuts Poland's ratings on deteriorating fiscal strength

Business Recorder reported that Moody's lowered Poland's sovereign credit rating to A3 from A2 on Friday, pointing to a sustained weakening of the state's public finances. According to the agency, Poland keeps funding large outlays on defence, infrastructure and welfare while carrying one of the largest budget gaps among EU members.

Moody's said heavy deficits have materially raised the government's debt load, and higher borrowing costs have made that debt harder to service. The agency anticipates the deficit will hover around 7% of GDP across 2026 and 2027, despite robust growth. Still, it changed the outlook from negative to stable, on the view that authorities will follow fiscal rules and consolidate faster once the election in November 2027 is over.

Finance Minister Andrzej Domanski called the downgrade serious yet composed, noting on X that growth remains rapid and the fundamentals stay strong. He added that strengthening public finances requires joint work across the state, including President Karol Nawrocki. The Fiscal Council had earlier warned that the 2027 draft budget contained no consolidation measures and judged the likelihood of debt climbing past 55% of GDP to be extremely high. The report also flagged political gridlock, with President Nawrocki having sent a windfall tax bill on oil and gas profits to the constitutional court in July.