Page 10 - Poland Outlook 2022

3.4 Debt

Poland’s foreign debt, which fell to 6.6pp to 54% of GDP in 2021 is expected to
continue to decline in 2022, ending the year at 48.4% of GDP. Of that, the
public sector’s debt will be equal to 17% of GDP.

Public debt, meanwhile, is forecast to go down from 55.8% of GDP last year to
53.3% in 2022 (or from 55.9% of GDP to 57% when calculated in line with EU
methodology), according to a survey carried out by the Business Insider
Polska magazine among commercial banks and financial think-tanks.

The general government deficit will thus narrow from 3.6% of GDP in 2021 to
around 3% in 2022, the survey results also showed. That will be the effect of
elevated inflation that will boost general government income versus earlier
assumption of price growth at just 3.3% against 7.6% real growth.

According to the International Monetary Fund, Poland should now become
careful and “avoid an expansionary fiscal stance in the context of overheating
risks,” according to its report in December.

“A modest further reduction in the fiscal deficit over the medium term would
help prepare for future fiscal challenges ... [such as] population aging and the
energy transition,” the IMF also said.

Poland’s standing with leading rating agencies is: ‘A-’ with stable outlook at
Fitch and Standard and Poor’s and ‘A2’ at Moody’s, also with stable outlook.

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