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5/15/16

Polish Economy: Moody’s puts Poland on negative watch over political crisis - by Jan Cienski

Poland avoided a ratings downgrade from Moody’s on Saturday, but the credit rating agency shifted its outlook from stable to negative citing unpredictable economic policies and a political standoff.

Poland is one of Europe’s fastest growing economies, but investor confidence has been shaken both by a host of expensive promises made by the right-wing Law and Justice party government, which won October’s election, and by a crisis over the country’s top constitutional court.

The country had feared a downgrade, which would have been the second after Standard & Poor’s in January.
Although Moody’s predicted the Polish economy would grow by 3.5 per cent this year and in 2017, the agency changed its outlook because of plans to increase spending and lower the retirement age.

It also warned about “unpredictable policies” like a promise to allow borrowers with mortgages denominated in Swiss francs to convert them to złotys, as well as a standoff over the Constitutional Tribunal.

“Though the implications of the constitutional changes for the independence of the Polish judiciary and therefore for the sovereign’s institutional strength remain unclear at this juncture, the crisis has the potential to impair investors’ perception of the rule of law and thereby their propensity to invest,” Moody’s said.

Read more: Poland: Moody’s puts Poland on negative watch over political crisis – POLITICO

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