Moody’s cuts Poland’s outlook to ‘negative’ on weaker fiscal outlook and political gridlock

(Reuters) – Credit ratings agency Moody’s lowered Poland’s outlook to “negative” from “stable” on Friday amid rising spending pressure and political gridlock.

“Our decision to change the outlook to negative reflects a materially weaker outlook for fiscal and debt metrics compared to our earlier expectations,” the agency said in a statement.

Poland’s economy has remained resilient, supported by domestic demand and EU funds, with trend real GDP growth near 3%, although a standoff between the government and the president risks slowing reforms and EU funds absorption.

“The outlook could return to stable if Poland enters a credible path of fiscal consolidation, significantly slowing down the growth of the public debt burden,” the Polish finance ministry said.

Fitch also lowered Poland’s out