Bloomberg News

Poland Debt Grade May Be Cut Without Budget Steps, Gilowska Says

October 12, 2011

Oct. 12 (Bloomberg) -- Poland’s credit rating may be cut unless the government takes measures to narrow the budget deficit, central bank policy maker Zyta Gilowska said.

The 2012 budget is based on “unrealistic” assumptions and the fiscal consolidation plan of Prime Minister Donald Tusk, who led his party to a second consecutive election victory on Oct. 9, is “not credible” and public debt is getting “dangerously close” to 60 percent of gross domestic product, Gilowska said in an interview in Warsaw yesterday.

“Such risks, especially in the light of the European financial situation crisis, weigh seriously on Poland’s perception,” Gilowska said. “Without the government action that defend Poland from the crisis effects, Poland’s credit rating may be cut.”

Polish government debt is rated A- by Standard & Poor’s and Fitch Ratings, putting it four steps above junk, and at A2 at Moody’s Investors Service. The country’s rating outlook may come under pressure unless the government presents “contingency plans” to reduce the budget deficit as economic growth slows, Jaime Reusche, an assistant vice president for sovereign risk at Moody’s in New York, said on Oct. 10.

--Editors: Balazs Penz, James M. Gomez

To contact the reporter on this story: Dorota Bartyzel in Warsaw at dbartyzel@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net


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