Czechia's improved credit rating sparks political fight over who deserves credit

International rating agency S&P Global Ratings has raised its outlook on Czechia's long-term rating from "stable" to "positive," while affirming the foreign-currency rating at AA- and the local-currency rating at AA. The agency expects the Czech economy to grow by an average of 2.3% a year between 2026 and 2029.

In his traditional Sunday video address, Prime Minister Andrej Babiš called the news "fantastic," saying Czechia had received the best rating outlook in its history. He said the agency had thereby proven the current government and its budget right.

Politicians argue over who deserves the credit

Finance Minister Alena Schillerová (ANO) announced the positive assessment on social media platform X, only for former Prime Minister Petr Fiala (ODS) to reply to her post: "You're welcome," he wrote curtly. Schillerová didn't let that slide: "Mr. Fiala, you've got it mixed up again. Rating outlooks kept deteriorating under your government."

"This is a testament to the Fiala and Stanjura government. S&P is basing this on figures that are the result of Fiala's rule," ODS member of the European Parliament Alexandr Vondra said on Sunday's edition of "Partie" on Prima TV. He added that the current cabinet's performance would show up in the agency's rating in a year or two.

"Sure, if the agency's report comes out a year after the election, I'd probably brag about it too. It's a sign that the Czech Republic really isn't falling apart," Foreign Minister and Motoristé party chairman Petr Macinka countered in the same discussion.

The agency also flags risks

Among the reasons for the improved outlook, S&P cited the Czech economy's resilience to external shocks, the solid state of public finances and the external financial balance, and the Czech National Bank's effective monetary policy.

At the same time, the agency pointed to risks: higher energy prices, developments in the Middle East, and the Czech government's looser fiscal policy. "These risks need to be taken seriously, which is why we're a bit wary of the budget and tried to do something about it — and we know a lot more needs to be done in the coming years," Macinka said on the matter.

Former Finance Minister Miroslav Kalousek believes the improved rating is good news for Czechia's creditors, but not for its taxpayers. He suggested the agency's assessment could be loosely paraphrased as: "We're warning about the loosening of this government's fiscal discipline, but there will be enough money for your interest and principal payments. If that means Czechs won't have money for a lot of other things, that's not our problem — your claims come first." The former minister posted this on X.

Around Prague, based on reporting by novinky.cz

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