• On 12 October 2018 rating agency S&P Global Ratings announced a decision about raising Poland's credit rating to A- for long term liabilities in foreign currency and A/A-1 for long and short term liabilities, respectively, in local currency.
• Rating assessment for short term liabilities in foreign currency remains at A-2.
• Rating's outlook is stable.

S&P Global Ratings' rating increase is a result of a competitive, diversified and balanced Polish economy, as well as responsible fiscal policy conducted by Polish government resulting in exceptionally good budget situation. Further improvement was also recorded in the category of international position of Poland (balance of payments), which was reflected in higher note in the "external assessment" sub criterion.

Faster economic growth and lower deficit

‘We are very pleased with S&P's decision on increasing rating of our country. We expected this, especially after April's lift of the outlook to positive. Rising assessment of Poland's creditworthiness confirms that our actions are right and lead to positive changes in Polish economy. We have faster than expected, balanced economic growth and lower than projected deficit' - Prof. Teresa Czerwińska, Minister of Finance said.

‘We are glad that our efforts in fiscal policy are appreciated. From the very beginning our government was determined to tighten the tax system and reform tax administration, which now brings measurable benefits.' – Minister Czerwińska underlined.

Agency analysts are also positive about Poland's development prospects. Strong acceleration of investment in the biggest corporates sector and public sector was underlined. They also noticed that government reacts efficiently to long term challenges, such as demographic changes, introducing e.g. Employee Capital Plans.

Rating prospects

According to the agency, Poland's rating could be raised if the real income growth in Poland will continue to outpace that of key trading partners without creating external imbalances or if the government will post budgetary surpluses leading to a reduction in outstanding public debt in absolute terms. The agency could consider raising the rating if new Employee Capital Plans will boost private savings, hence reducing the government's contingent liabilities related to the aging and declining working population. On the other hand, rating could be lowered if Poland's fiscal performance will deteriorate significantly or if rapid wage growth will lead to a faster-than-expected increase in net external borrowing, a potential sign of eroding competitiveness.