S&P Cuts Poland’s Zloty Debt Rating to A− and Changes Outlook to Negative

S&P Global Ratings lowered Poland’s long-term local-currency sovereign rating from A to A− on 6 November 2026 and changed the outlook on both long-term ratings from stable to negative. It kept the foreign-currency rating at A−, citing rising debt and difficulties reducing the fiscal deficit.

By Adam Ujazdowski. Adapted from the Polish original, published on 7 November 2026.

The decision brought the ratings for Poland’s zloty and foreign-currency obligations into line. S&P also cut the short-term local-currency rating from A-1 to A-2. The short-term foreign-currency rating remained at A-2.

Deficit forecast above 7% of GDP through 2027

S&P forecasts cited by the Polish Bank Association put the general government deficit at 7.1% of GDP in both 2026 and 2027. The shortfall is projected to narrow to 6.2% in 2028 and 5.3% in 2029, remaining high despite that improvement.

The agency links the fiscal imbalance partly to defence expenditure of about 4–5% of GDP, rising social spending and public-sector wage costs. It views the problem as primarily structural. Interest payments are forecast to absorb an average of about 8% of general government revenue over 2026–2029.

Net debt projected to exceed 70% of GDP

According to the Polish Ministry of Finance statement describing S&P’s decision, the agency expects general government net debt to rise from 53% of GDP in 2025 to more than 70% in 2029. It sees rising indebtedness as reducing the government’s capacity to respond to further shocks. That is one of the main reasons for the negative outlook.

Political divisions constrain deficit reduction

S&P considers a substantial reduction in the deficit before the 2027 parliamentary election unlikely. It points to political polarisation and difficulties in co-operation between the government and the president. In the agency’s view, the president’s veto powers constrain implementation of the budget plans of the government led by Prime Minister Donald Tusk.

Growth expected to remain around 3%

S&P also highlights the resilience of Poland’s economy. It expects growth of about 3% over the next two to three years, supported by strong domestic demand and exports.

The negative outlook signals the risk of a further downgrade. S&P said that could follow if persistent deficits and rising debt weakened investor confidence, increased financing costs or forced an abrupt fiscal adjustment that damaged the economy. A possible escalation of Russia’s war against Ukraine remains a separate risk.

A return to a stable outlook would require a sustained and substantial reduction in deficits. Those measures would need to bring debt down gradually without materially weakening economic growth.

Sources: Polish Ministry of Finance statement dated 6 November 2026; Polish Bank Association, “S&P lowers Poland’s rating outlook to negative”, 6 November 2026.