Polish sovereign rating outlook at risk from Constitutional Tribunal dispute, analyst warns
An analyst at DM BOŚ says the row over the Constitutional Tribunal could push S&P to cut Poland's rating outlook from stable to negative. The agency is due to publish its review on Friday.
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Rating review due Friday
S&P Global Ratings is scheduled to publish an update on Poland's sovereign rating on Friday (DM BOŚ: spór wokół TK może wpłynąć na obniżenie perspektywy ratingu przez S&P – wnp.pl) (Chaos wokół TK a rating Polski. Sądny dzień nadchodzi. Są obawy – money.pl). The agency currently rates the country A- with a stable outlook.
Analysts see a real risk to the outlook
Marek Rogalski, an analyst at Dom Maklerski BOŚ, said on Monday that the dispute around the Constitutional Tribunal could lead S&P to move the outlook from stable to negative (Pogorszenie perspektywy ratingu Polski przez kryzys wokół TK? Analityk: Istnieje takie ryzyko – Forsal.pl). He argued that markets treat the tribunal crisis as a form of political risk and factor it into the valuation of the zloty, though he did not see it as the sole driver of any decision. Economist Janusz Jankowiak went further, calling a negative outlook change from S&P "highly probable".
Where the other agencies stand
Fitch and Moody's also rate Poland at the same level as S&P, at A- and A3 respectively. Fitch already holds a negative outlook. Moody's cut Poland to A3 in September and moved its outlook to stable at the same time, after previously holding an A2 rating with a negative outlook.
What it means for the market
A move to negative would signal to investors that the agency sees a rising chance of a downgrade in the coming period. Rogalski's view is that the tribunal issue is one of several factors weighed by the market, and that it highlights the political polarisation in the country.
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