S&P downgrades Poland's local-currency rating to A-, outlook turns negative

what happened

Reuters reports that S&P Global has lowered Poland's long- and short-term local-currency sovereign ratings to A-/A-2 from A/A-1. The agency also shifted its outlook from stable to negative.

The agency points to high budget deficits and fast-growing public debt, which could restrict the government's room to respond to future shocks. Still, S&P credited Poland's diversified economy, flexible markets and access to external funding. Its foreign-currency ratings were kept at A-/A-2.

In a September forecast, the finance ministry expects general government debt to climb to 69.3% of GDP in 2027 from 67.6% in 2026, reaching 76.6% by 2030. Less than two months earlier, Moody's had also downgraded Poland's sovereign rating.

why it matters

For markets, this adds pressure on Polish government bonds and the zloty, since a weaker rating usually raises the cost of state borrowing. The negative outlook signals that a further downgrade is possible.

market impact

Polish bonds and zloty: weaker rating and negative outlook add risk-premium pressure.

• ▼Polish government bonds pressure down — a lower rating and negative outlook raise the risk premium investors demand
• ▼Polish zloty pressure down — a weaker fiscal outlook reduces the currency's appeal

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