2023-10-17 14:45 update: 2023-10-17, 21:20
Fot. EPA/ANDREW GOMBERT
The probable change of government in Poland will help improve Warsaw's relations with Brussels, which in turn would have a positive effect on the country's credit rating, Moody's rating agency has said.
Moody's wrote that "the likely change in government to a (centrist Civic Coalition - PAP) KO-led coalition would improve relations with the EU... and give Poland access to sizable funds."
The agency added that the search for coalition partners by the incumbent conservative Law and Justice (PiS) party and KO with a view to forming the next government would lead to a "period of uncertainty because negotiations among the parties will likely take several weeks."
Although PiS has won the election, it seems to be lacking about 30 MPs to secure a majority in parliament. Meanwhile, KO and its two partners, the centre-right Third Way and The New Left, have vowed to form a coalition, which is likely to have a comfortable majority.
Moody's pointed out that large sums in EU funding remain suspended over a rule-of-law dispute.
"The incumbent government's contentious relationship with the EU has put significant amounts of EU funds at risk," Moody's wrote. "Poland is one of the largest potential beneficiaries of NGEU (Next Generation EU - PAP) funding, including EUR 22.5 billion in grants and EUR 34.5 billion in loans requested, totaling 8.7 percent of 2022 GDP."
Moody's highlighted that both PiS and KO had campaigned for "looser fiscal policies."
The agency forecast an increase in Poland's general government debt in 2023 to 5.3 percent of GDP, staying at the relatively high level of 4 percent in 2024 as a result of "expansionary fiscal policy."
"We expect deficits to fall below 3 percent of GDP from 2025 onwards as a result of revenue growth and expenditure cuts," Moody’s said. (PAP)
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