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Notes from Poland is run by a small editorial team and is published by an independent, non-profit foundation that is funded through donations from our readers. We cannot do what we do without your support.

Credit rating agency S&P has revised Poland’s outlook to negative, saying that the country has seen “one of the most significant fiscal deteriorations globally” and that “political polarisation hinders fiscal consolidation”. It also lowered the country’s long- and short-term local currency ratings.

S&P’s decision follows similar ones by the other members of the big three rating agencies. Fitch has had Poland on negative outlook since last year, while Moody’s cut the country’s credit rating in September this year to its lowest level since 2002.

In a statement issued on Friday evening, S&P said that its “negative outlook reflects the risk that elevated budgetary deficits and rising government debt could constrain policy flexibility in the face of future shocks”.

“This could expose Poland to shifts in investor sentiment or necessitate a sharp fiscal adjustment that would weigh on economic growth,” they added.

S&P o finansach Polski: „Takie pogorszenie sytuacji budżetowej należy do najpoważniejszych na świecie”.

Dług netto ma wzrosnąć o ponad 20 pkt proc. PKB w 5 lat i przekroczyć 70% PKB w 2029 r.

S&P obniżyła rating długu w PLN i perspektywę do negatywnej.

— Piotr Nowak (@PiotrNowak_PL) November 7, 2026

Poland has struggled with ballooning budget deficits in recent years, driven by a rapidly expanding defence budget in the wake of Russia’s full-scale invasion of Ukraine in 2022 and longer-term increases in social spending.

Last year’s deficit, at 7.3% of GDP, was the second-highest in the European Union. This year it is forecast to drop slightly, to 6.7%, according to recent finance ministry projections. But next year’s budget foresees a deficit of 7.1%.

Those figures are much higher than those the government pledged to reach when, in 2024, Poland was placed under the EU’s excessive deficit procedure. For example, the deficit was supposed to fall to 3.7% of GDP in 2027.

Moody’s, one of the big three global credit rating agencies, has cut Poland’s rating from A2 to A3.

The last time the agency had Poland at such a low level was 2002. It is also the first time any of the big three agencies has downgraded Poland since 2016 https://t.co/qUAEouqhlx

— Notes from Poland 🇵🇱 (@notesfrompoland) September 19, 2026

S&P says that it projects Poland’s net debt exceeding 70% of GDP by 2029. That rise of “more than 20 percentage points over five years marks one of the most significant fiscal deteriorations globally”.

The agency notes that Poland will hold parliamentary elections in 2027, making any “meaningful consolidation unlikely” before then. Moreover, the veto power of opposition-aligned President Karol Nawrocki means the government “faces constraints in advancing its legislative and fiscal consolidation agenda”.

Pointing to the ongoing crisis around the constitutional court, S&P also warns that “renewed institutional tensions could weigh on policy predictability”.

However, the agency notes that Poland’s economy remains “resilient”, with real GDP growth projected to average around 3% between 2027 and 2029. It also points to the fact that the country has seen a peak in EU-funded investment this year, while exports have picked up.

As well as shifting Poland’s overall outlook to negative, S&P downgraded its local currency ratings – meaning its assessment of the country’s willingness and ability to service debt denominated in domestic currency – from A/A-1 to A-/A-2, the same level as its foreign currency ratings.

“Our fiscal projections are now weaker than previously envisaged, and we note a track record of recent fiscal slippages amid a challenging policy environment, which underpin our assessment of Poland’s reduced fiscal flexibility,” wrote the agency.

Finance minister Andrzej Domański acknowledged S&P’s decision to lower Poland’s outlook to negative in a social media post. However, he pointed to the section of the agency’s report in which it said that the government is constrained by presidential vetoes.

Nawrocki has vetoed a record number of bills since becoming president last year, including several fiscal measures. “Despite the presidential vetoes, we will continue taking steps to strengthen the country’s finances,” wrote Domański.

🇵🇱 Agencja S&P utrzymała rating Polski na poziomie A-, obniżając jednak jego perspektywę do negatywnej.

„Rząd premiera Donalda Tuska napotyka ograniczenia w realizacji swoich planów legislacyjnych i konsolidacji finansów publicznych ze…

— Andrzej Domański (@Domanski_Andrz) November 6, 2026

However, Nawrocki notes that the ballooning budget deficits preceded his coming to power, and has blamed the government of Prime Minister Donald Tusk for overseeing budgetary “chaos” and causing “a deep crisis of credibility”.

In response to S&P’s announcement, Marcin Ociepa, deputy head of the parliamentary caucus of Law and Justice (PiS), the largest opposition party, accused the government of “trying to shift responsibility for Poland’s credit rating downgrade [sic] onto the president”.

“Any family that managed its finances the way Donald Tusk manages our country’s finances would drown in debt and go bankrupt,” wrote Ociepa. “That is exactly what awaits Poland if this government remains in power.”

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Notes from Poland is run by a small editorial team and published by an independent, non-profit foundation that is funded through donations from our readers. We cannot do what we do without your support.

Daniel Tilles is editor-in-chief of Notes from Poland. He has written on Polish affairs for a wide range of publications, including Foreign Policy, POLITICO Europe, EUobserver and Dziennik Gazeta Prawna.