WARSAW (Reuters) – Poland deserves higher credit ratings from leading agencies such as Moody’s, Fitch and S&P, because its finances and economic growth are solid, Finance Minister Tadeusz Koscinski said on Friday.
In an interview with Reuters, Koscinski also dismissed criticism that investors might be discouraged by lower-than-expected economic growth in 2019 or by Warsaw’s battles with the EU over its overhaul of the judicial system.
Since coming to power in 2015, Poland’s eurosceptic, nationalist Law and Justice (PiS) party has introduced a series of judicial reforms which EU officials and democracy activists say may breach the bloc’s rule of law standards.
“Investors see Poland in a different way. They are interested in the government’s plan for further development and in macroeconomic parameters,” Koscinski said, when asked about the possible impact of the reforms on investors’ perceptions.
“I hope that agencies will be analyzing our economic situation and will raise our rating. I think the current ratings do not fully reflect Poland’s economic situation.”
Standard & Poor’s and Fitch both have Poland’s long-term ratings at A- with a stable outlook, while Moody’s rates the EU’s biggest former communist member state at A2.
Poland expects its general government deficit will amount this year to 1.2% of gross domestic product, well below the EU’s ceiling of 3%.
Some analysts say the 2020 budget is built on a promise of one-off revenues and that some of them may not materialize. Koscinski saw no need for a plan B and said that the 2020 budget was balanced when measured according to domestic methodology.
He saw no need to change the rule that caps state budget spending in order to open the way for increased social spending.
“We have to talk about and analyze (this issue), but for the moment I do not see a need to change the spending rule due to social spendings,” he said.
He added that he plans no significant debt issue abroad this year, as he wants to avoid adding foreign exchange risk to the budget, after Poland recently issued green bonds and bonds with a negative yield to strengthen its investment status.
However, Koscinski said, Poland may repeat its green bonds issue.
Reporting by Pawel Florkiewicz and Marcin Goclowski; Editing by Gareth Jones