Scope Ratings reviews its ratings either yearly, or every six months in the case of sovereigns, sub-sovereigns and supranational organisations. Scope performs monitoring reviews to determine whether outstanding ratings remains proportionate. Monitoring reviews are conducted either by performing a portfolio review in terms of the applicable methodology/ies, latest developments, and the rated entity’s financial and operational aspects relative to similarly rated peers; or through targeted reviews on an individual credit. Scope publicly announces the completion of each monitoring review on its website.

Scope completed the monitoring review for the Republic of Poland (A+/Stable; S-1+/Stable) on 26 January 2021, incorporating the update from the sovereign methodology. The review resulted in no action on the assigned ratings. This monitoring note does not constitute a rating action nor does it indicate the likelihood of a credit rating action in the short term. The latest information on the credit ratings in this monitoring note along with the associated rating history can be found on www.scoperatings.com.

Key rating factors

Poland’s long-term A+/Stable ratings are underpinned by the country’s strong macroeconomic fundamentals and credible fiscal and monetary policy frameworks, resulting in low economic volatility alongside reduced external sector risks. Poland’s economy proved relatively resilient in 2020, with the pandemic outbreak disproportionately hitting services, more than industry, construction and retail trade. Poland benefits from a profitable, liquid, and well capitalised banking sector and solid public finances, providing space for a large and effective set of fiscal and monetary intervention to support the healthcare sector, businesses and households to cushion the economy from the pandemic’s impact. These factors, combined with the unprecedented EU-wide fiscal and monetary stimulus in response to the crisis, underpin Scope’s view that the country is well positioned to weather the Covid-19 crisis and will return to strong growth from 2021 onward. Against these strengths, the rating considers structural challenges posed by i) the country’s low savings rate, mirroring the low investment rate of the Polish non-financial corporate sector which is dominated by labour intensive small and medium-sized enterprises; ii) growing budgetary pressures weighing on public finances, given demographic developments, substantial social spending programmes and a weak social infrastructure; and iii) political headwinds with the EU and a polarised political environment.

For the updated scorecards accompanying this review, click here.

The methodology applicable for the reviewed rating(s) and/or rating Outlook(s) (Rating Methodology: Sovereign Ratings, 9 October 2020) is available on https://www.scoperatings.com/#!methodology/list.
This monitoring note is issued by Scope Ratings GmbH, Lennéstraße 5, D-10785 Berlin, Tel +49 30 27891-0.
Lead analyst: Jakob Suwalski, Director.

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