Poland

This report does not constitute a rating action. Overview Institutional and economic profile Flexibility and performance profile Poland?s economy remains resilient. Poland posts moderate external and public debt. --Poland?s economy will likely expand by about 1% in 2023 and accelerate thereafter. --We assume that Poland will finance its moderate current account deficits with ample external funding, including EU transfers. --We continue to expect that the EU will delay disbursements under its Recovery and Resilience Facility (RRF) to Poland, at least until after this fall?s parliamentary elections. --We expect that the fiscal deficit will widen this year due to election-driven spending proposals, then narrow from 2024. --Poland has a stable energy supply mix, and we do not consider a direct NATO-Russia

...S&P Global Ratings projects that Poland's economy will expand at a modest 1.1% in 2023. The Polish economy has remained resilient to the direct fallout of the Russia-Ukraine war, with GDP growing by more than 5% last year. Inflation remains high and continues to weigh on household consumption this year, even though it is easing. However, we expect solid net exports and government investment, particularly in the military, to underpin growth in 2023. Poland's general government deficit will likely widen to slightly less than 5% of GDP in 2023 while the current account deficit narrows markedly. Although the government's unwinding of several fiscal support measures and reduced energy prices help reign in the fiscal deficit, we think the government is more likely to consolidate intentionally next year, after the fall 2023 elections. Election-related social spending proposals and ambitious medium-term military spending plans could complicate this, but we forecast net general government debt to...

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