Fitch Ratings said in a new report that the anticipated economic slowdown affecting Poland's economy, and more difficult and costly access to external funding in the form of bank loans and bonds, will negatively impact the Polish corporate sector in 2009. Another challenge is a marked depreciation of the Polish zloty against the euro and US dollar since September 2008, which has negatively impacted companies with substantial foreign currency-denominated debt that were not able to offset the zloty's depreciation with currency hedging.

The agency forecasts that Poland's ('A-' (A minus)/Stable) real GDP growth will slow to 1.2% in 2009 from an estimated 4.8% in 2008, and compared to an over 6% annual growth rate in 2006 and 2007.

"The economic slowdown and uncertain outlook have prompted many companies to review their strategies, to focus on cost control and restructuring, including headcount reduction, and scale back investment and acquisition plans as projects are cancelled or delayed," says Arkadiusz Wicik, Director in Fitch's Corporate team. "These efforts by companies are primarily aimed at maintaining free cash flow and creditworthiness during the ongoing turbulent times."

The global financial crisis has already affected Poland and the availability of external funding, including bank loans and bonds for corporates. It has become difficult and more costly to obtain funding, even for companies with solid creditworthiness, as banks have become more cautious about lending to the corporate sector. Fitch believes that the domestic bond market, which according to the agency's estimates now accounts for almost 10% of the total debt of Polish companies, may start to become a more predominant and feasible funding alternative for corporates with good financial and business profiles especially if banks continue to preserve capital and loans remain scarce.