S&P holds Poland's BBB+ rating, raises outlook

Polish Development and Finance Minister Mateusz Morawiecki said that the decision by the rating agency confirmed "the credibility of our economic policy and the healthy state of public finances".

Standard & Poor's said in a statement: “The outlook revision reflects the reduction in our near-term concerns over a further weakening of key institutions, most importantly Poland's central bank, caused by the government's efforts to change and control Poland's key independent institutions” .

The Polish Finance Ministry said on its website that Standard and Poor's concerns over the independence of Poland's central bank were “irrational”.

The “independence of the National Bank of Poland is undeniable, which was eventually noticed by S&P,” the finance ministry said in a statement.

In January, Standard & Poor’s lowered Poland's rating to BBB+ from A- and changed its outlook to negative. The move sparked anger in Warsaw, with the Polish finance ministry calling the decision “incomprehensible”.

The agency said at the time that the downgrade reflected its view “that Poland’s system of institutional checks and balances has been eroded significantly as the independence and effectiveness of key institutions ... is being weakened by various legislative measures initiated since the October 2015 election” won by the conservative Law and Justice (PiS) party.

Economist Lars Christensen tweeted in response that the Standard & Poor's January decision was a “shocker” and “a bit too aggressive”, while Marcin Piątkowski, a senior economist at the World Bank, called it “absurdly premature and abrupt”.

(vb/pk)

Source: mf.gov.pl, standardandpoors.com