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 Austria (AAA/Stable; S-1+/Stable) on 11 March 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

The AAA rating is supported by Austria’s euro-area membership, its wealthy, diversified and internationally-competitive economy, robust economic growth potential, a commitment to medium-run fiscal consolidation, a favourable public-debt profile, low private sector debt levels and a resilient banking system, including reduced system exposure to higher-risk Central and Eastern European countries. The impact of the Covid-19 shock poses near-term economic and fiscal challenges, while Austria’s ageing society presents medium-to-long-term risks to public expenditures and growth. Limited reforms to an overly complex federal fiscal structure, which results in weak incentives to contain costs at the subnational level, as well as Austria’s labour-unfriendly taxation system, pose additional challenges. The Stable Outlook reflects Scope’s view that the risks Austria faces remain manageable given the economy’s inherent credit strengths.

For the updated scorecards accompanying this review, click here.

The methodology applicable for the reviewed rating(s) and/or rating Outlook(s) (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: Alvise Lennkh, Executive Director.

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