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Moody’s lowers Poland’s rating to A3. Stable outlook for the złoty
Moody’s downgrades Poland’s rating. What it means for public finances and the złoty
Moody’s has cut Poland’s long-term foreign-currency rating by one notch, to A3 from A2. The outlook remains stable. It is an important signal for the country’s creditworthiness, although it does not automatically mean a change in the day-to-day exchange rate of the złoty. The decision reflects the agency’s view that Poland’s fiscal position has deteriorated permanently.
In practice, the agency points to high deficits, rising public debt and higher financing costs. The report also says fiscal policy effectiveness has weakened, while the authorities have shown limited willingness to rebuild fiscal buffers when economic conditions are better.
Moody’s expects the general government deficit to remain high in both 2026 and 2027, despite strong economic growth. Behind that are rising healthcare costs, public investment, as well as social and defense spending.
The agency also said that general government debt is set to rise to 68,9 proc. in 2025 r. At the same time, it stressed that part of the debt is building up outside the domestic definition of public debt, including through funds managed by BGK and selected state-controlled entities.
Risks to the credit rating and possible scenarios
Political factors also matter in the agency’s view. Moody’s points to tensions between the government and the president, as well as the parliamentary election in November 2027, which could delay a larger fiscal consolidation. The agency nevertheless believes Poland still benefits from relatively strong legal fiscal frameworks.
The report recalls the precautionary debt threshold of 55 proc. PKB and the constitutional limit of 60 proc. PKB under the domestic definition. Moody’s also sees high geopolitical risk linked to Russia’s war against Ukraine.
On the positive side, the agency still expects strong economic growth. It forecasts real PKB growth of 3,7 proc. in 2026 and points to support from investments financed by the KPO, cohesion funds, defense spending, infrastructure, as well as private consumption and net exports.
Upward pressure on the rating could emerge if public debt started to decline permanently and the fiscal system moved onto a credible consolidation path. Downward pressure could come from bypassing fiscal rules, significant changes to those rules, clearly higher debt, or a sharp economic shock or deterioration in security in the region.
After Friday’s decision, the three largest rating agencies assess Poland at a similar level. Moody’s rates it A3 with a stable outlook, while Fitch and S&P rate Poland’s creditworthiness at A-.
Government response
Finance and Economy Minister Andrzej Domański described the decision as serious, but said it should be taken calmly. He promised further strengthening of public finances and stressed that cooperation between all state institutions, including the president, is needed.
The finance ministry said Moody’s downgrade reflects a lasting weakening of Poland’s fiscal strength. In its statement, the ministry also repeated that persistently high deficits and rising interest costs are likely to lead to higher public debt and weaker debt-servicing metrics.
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