Poland has avoided a downgrade by the ratings agency Moody, but its outlook was cut from stable to negative due to new government spending policies seen as risky to state finances and a more unpredictable investment climate.

The Moody's report was published early Saturday. Investors had been bracing for an outright downgrade after a similar move earlier this year by Standard & Poor's, which cited the erosion of the independence of key institutions and increased spending by the nationalist-minded Law and Justice party.

Moody's says its affirmation of Poland's A2 rating is based on the country's economic resilience as reflected in a large, diversified economy that has shown robust real GDP growth irrespective of external headwinds.