WARSAW: Poland is caught in a constitutional crisis that is negative for its rating and may hurt the investment climate, credit agency Moody's Investors Service said in a statement on Monday.
Moody's comments come ahead of a scheduled rating review on May 13 and follow a decision by peer Standard & Poor's to downgrade Poland in January.
"Poland is facing heightened political risk as a result of its constitutional crisis," Moody's said. "These developments may impair Poland's attractiveness for foreign investors, a credit negative."
In January, S&P downgraded Poland's rating to BBB+ outlook negative from A- with a positive outlook, saying the ruling conservatives had weakened the independence of key institutions, particularly the constitutional court.
Since taking office in October, the Law and Justice (PiS) party has enacted a law increasing the number of judges at the constitutional court required to make rulings and changing the order in which cases are heard.
It has also rejected court appointments made by the previous government, fuelling concerns about the rule of law in the European Union's largest eastern state.
Moody's currently has the highest rating on Poland among the three major rating agencies, at A2, with Fitch a notch lower. Both ratings have stable outlooks.
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