By Alan Crosby
VIENNA (Reuters) - Poland's credit rating could get an upgrade if a reform-minded government emerges from next week's general election, Standard and Poor's credit analyst Kai Stukenbrock said on Monday.
Stukenbrock told the Reuters Central European Investment Summit in Vienna that Poland's current A/minus foreign and local currency debt rating has been constrained by political instability and delays to reforms.
"One of the main constraints is the political outlook, the lack of reforms, the need for further reforms, the need for further fiscal consolidation, for tackling the systems of social security," he said.
"So potentially, if a government came in that was very decisive in these matters, it could benefit the rating over the medium term."
Conservative Prime Minister Jaroslaw Kaczynski faces a tough challenge in the October 21 election from the main opposition party, the centre-right Civic Platform (PO). Unless they win an outright majority, the conservatives may lose power if the pro-business PO and the centre-left form a coalition.
Stukenbrock said the European Union's biggest ex-communist member had lost its way on reforms and that Kaczynski's government had failed to push ahead with cuts in welfare spending that international institutions say are needed to ensure the long-term security of Poland's public sector.
REFORM PERSPECTIVE
"From an economic reform and fiscal prudence perspective, when this government was formed that was already the worst case (scenario)," he said. Continued...
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