FITCH Ratings revised Poland’s outlook to ‘negative’ from ‘stable’, citing growing risks to public finances as the key driver.
The agency flagged wider-than-expected deficits and a lack of credible fiscal consolidation plans, warning that political hurdles could delay reforms ahead of the 2027 parliamentary elections.
It now sees government debt climbing more steeply, approaching 68 per cent of gross domestic product by 2027.
President Karol Nawrocki’s early vetoes and tax opposition reflect deepening political divides that could limit the coalition’s ability to push through tough fiscal measures ahead of the 2027 elections, the agency said.
Fitch said the implementation of reforms required to maintain EU funding will remain critical to maintaining strong GDP growth amid these challenges.
Finance Minister Andrzej Domanski posted on X that the government was “acting to combine stable finances with investments and necessary security expenditures”.
Poland’s government has said security is a priority due to what it sees as an increased threat from Russia, allocating a record 200 billion zlotys ($55bn), or 4.8pc of GDP, for defence in the draft 2026 budget.
“Nevertheless, this is a warning signal that everyone – including the president and his advisers – should take note of,” Domanski said.
Fitch said it expects real GDP growth of 3.2pc in both 2025 and 2026, outpacing the 2.3pc peer median, supported by resilient domestic consumption and stronger absorption of EU funds, which are seen offsetting the drag from US tariffs on the euro zone.
While Poland’s diversified economy and EU membership support its rating, failure to stabilize debt or improve fiscal discipline could trigger a downgrade.
Fitch affirmed Poland’s issuer default rating at ‘A-’.
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