Dagong maintains Poland credit ratings

Chinese credit rating agency Dagong Global Credit Rating Co., Ltd. announced on Tuesday that it will maintain the local and foreign currency sovereign credit ratings for the Republic of Poland as A and A- respectively, each with a negative outlook.

Dagong said the solvency of the Polish government is basically stable but the downward pressure is comparatively large, weighed down by fiscal austerity in the short term and an unfavorable external environment.

Under the pressure of domestic fiscal consolidation and the sluggish economy in the euro zone, Dagong expects Poland's growth rate to drop to 1.3 percent in 2013 and 2.2 percent in 2014.

Since it is hard to resolve issues such as weak domestic investment and insufficient labor market flexibility, the country's longer-term economic growth will be around 3 percent, Dagong added.

Amid a domestic economic slowdown and strong opposition against the austerity measures, Dagong predicted Poland's deficit rates in 2013 and 2014 will fall to 3.4 percent and 2.9 percent, respectively.

But the general government debt ratio will increase accordingly, a hindrance for improvement of government solvency in the longer term, the agency warned.