Credit Manager Magazine 6/2021

47 CREDIT MANAGER MAGAZINE czerwiec / june 2021 ANALYSIS Dennis Shen Dennis Shen is a macroeconomist and a Director in sovereign ratings with Scope Ratings in Berlin, Germa- ny. Before he joined Scope in 2017, Dennis was a European Economist with Alliance Bernstein in London. Dennis graduated from the MPA in International Development from the London School of Economics in 2013 and completed undergraduate studies at Cornell University. When it comes to addressing climate change, Poland – as well as the Czech Republic and Hungary – lag behind more advanced EU economies. Poland is also more vulnerable on average, in terms of potential economic and human losses, than the rest of the EU to extreme weather events, according to Ger- manwatch’s Global Climate Risk Index 2020. Government’s ability to effectively activate EU funds and set environmental priorities a concern Decarbonising the Polish economy by 2050 would result in job creation in new and inno- vative sectors. Our concern remains the Polish govern- ment’s capacity to fully and effectively acti- vate EU funds, particularly given a lack of ambition on the timetable and in the detail with respect to how authorities plan to de- ploy EU funds. The government presently intends to invest in renewables and build the country’s first nuclear power plant, albeit the latter proj- ect remains controversial. In another step forward, the government, the Polish Mining Group – one of the EU’s largest mining firms – and national unions have agreed to phase out coal mining by 2049 – albeit at a mea- sured pace. The Polish recovery and resilience plan in- cludes measures for improving air quality, en- ergy-efficiency in buildings, the development of renewable energy sources, zero-emission transport and access to broadband internet. However, the plan lacks clarity in respect to what environmental priorities should be, even as pressure from the EU seems to have convinced President Andrzej Duda and oth- er political leaders in making addressing en- vironmental issues a higher priority. A new, more sustainable econo- mic growth model would enhance Poland’s credit outlook From Scope’s ratings perspective, a move to a new, more sustainable economic growth model would enhance Poland’s credit out- look by making the economy less dependent on investment in manufacturing and more reliant going forward upon innovation and improving productivity. Poland’s robust economic and fiscal outlook provides a good opportunity to address these structural challenges. We note positively that Poland has again proven its resilience eco- nomically amid this current international crisis. The government’s swift and effective fiscal and monetary response complement- ed an unprecedented EU-wide fiscal and monetary stimulus response to the crisis and “From Scope’s ratings perspective, a move to a new, more sustainable economic growth model would enhance Poland’s credit outlook by making the economy less dependent on investment in manufacturing and more reliant going forward upon innovation and improving productivity.” resulted in real output declining in Poland by a comparatively moderate 2.7% in 2020, well under the EU aggregate’s 9.8% drop. For this year and next, we expect average Polish annual growth of 5.25% over 2021-22, above an expected growth rate for the EU of about 4.7% for these two years. Dr. Zuzana Brixiova Schwidrowski, former Director of Sovereign and Public Sector ra- tings with Scope Ratings GmbH, contributed to this article.