Poland maintains good EU integration

In its annual report on Poland, Moody’s Investors Service says its A2 government bond ratings and stable outlook reflect the country’s advanced economic and financial integration with the European Union, vibrant economic performance and proactive debt management policies.

“Poland has enjoyed several years of strong growth thanks to sound monetary policy management, low inflation, and considerable foreign direct investment,” said Moody’s Vice President Jonathan Schiffer, author of the report. “The strengthened integration with Europe includes the purchase of several Polish banks by foreign institutions.”

Schiffer said the recently-elected coalition government led by the Civic Platform party will likely emphasize structural reforms on the expenditure side of the budget. These could include lower corporate and personal tax rates and a push for larger contributions by farmers to their pensions.

“The key drivers that would lead to an upgrade in Poland‘s government ratings lay mainly in the fiscal arena,” said Schiffer. “Obvious target areas for structural reform are rural sector pensions, health and education, and social welfare transfers.”

By way of comparison, Schiffer said, Poland‘s government ratings are at the same level as Latvia, Lithuania, Hungary, Korea and Israel; they are one notch above Malaysia, and one notch below Czech Republic and Estonia.