The key drivers for the affirmation are:

1) The Polish government has achieved significant fiscal consolidation and remains committed to ensuring the sustainability of its public finances, despite a deteriorating macroeconomic environment.

2) The government's balance sheet is improving following a peak in debt ratios in 2011.

3) The sovereign's ratings are constrained at the A2 level given continued concerns about external and financial vulnerabilities.

RATINGS RATIONALE

The main driver underlying Moody's decision to affirm Poland's sovereign rating is the government's significant progress on fiscal consolidation and its continued commitment to ensuring the sustainability of its public finances, despite a deteriorating macroeconomic environment. The general government deficit narrowed to 5.0% of GDP in 2011 from 7.9% in 2010, exceeding the government's target of a 5.6% deficit in 2011. However, Moody's expects this fiscal adjustment to slow down and a deterioration in the outlook for the Polish economy, with real output likely to grow by 2.2% in 2012 and growth likely to decelerate to 1.8% in 2013. As a result of the slowdown, the Polish government has increased its 2012 general government deficit target to 3.5% of GDP, which is in line with Moody's forecast. The 2013 budget envisages a narrowing of the fiscal imbalance to 3.0% of GDP, striking a balance between further consolidation and support for the economy.

The second driver underpinning the affirmation of Poland's government bond rating is Moody's assessment that the government's balance sheet is improving. While the pace of consolidation has slowed, the Polish authorities continue to enact structural consolidation measures that seek to ensure the sustainability of public finances. While there is some risk of fiscal slippage given the composition of the adjustment which relies on growth-dependent revenues, the outlook for the consolidation programme remains positive. Moreover, debt ratios have begun trending down in 2012 following a peak in 2011 when the debt-to-GDP ratio reached 56.4%. Moody's expects that debt will fall to 55.7% of GDP by the end of 2012 and subsequently stabilise at around that level in 2013 as economic activity decelerates. Beyond 2013, as economic performance improves and the deficit continues to narrow, Moody's expects that the Polish government's balance sheet will strengthen given favourable debt dynamics.

The third factor informing today's affirmation of the Polish government's rating and stable outlook is Moody's view of sustained external and financial vulnerabilities, which are perhaps the weakest aspects of the sovereign's credit profile and therefore warrant close monitoring. While the fully floating exchange-rate regime and the Flexible Credit Line offered by the International Monetary Fund (IMF) serve as powerful anchors for market confidence and mitigate some of the concerns related to external finances, which remain weaker than those of other 'A' category peers. Financial vulnerabilities stemming from foreign-currency loans in the banking sector also limit improvements to the sovereign's creditworthiness. However, these vulnerabilities are offset by the two favourable rating drivers noted above, hence the continued stable outlook.

WHAT COULD MOVE THE RATING UP/DOWN

Moody's would consider upgrading Poland's long-term sovereign rating if the government's financial strength were to improve to the extent that the structural budget deficit is eliminated and debt ratios sustainably decline, resulting in a significant strengthening of the government's balance sheet. Upward pressure on the ratings could also result from a reduction in external vulnerabilities through a sustainable narrowing of the current account deficit and a strengthening of the country's external finances over the medium term.

Both the A2 (long-term) and Prime-1 (short-term) ratings could experience downward pressure in the event of significant fiscal slippage that would jeopardise consolidation targets and lead to a further deterioration in debt dynamics, thereby impairing the government's financial strength. Moreover, Moody's would also view negatively any substantial increases in external and financial vulnerabilities or dwindling potential growth prospects.

COUNTRY CEILINGS

Moody's has today also changed the local-currency country risk ceilings to Aa3 from Aaa. This is the maximum credit rating achievable in local currency for a debt issuer domiciled in the country. The rating agency has also changed Poland's foreign-currency bond country ceiling to Aa3 from Aa1, while maintaining the short-term foreign-currency bond country ceiling at P-1, its country ceiling for foreign-currency bank deposits at A2 and the short-term foreign currency bank deposit ceiling at P-1. These ceilings are constrained by the local-currency ceiling as they also capture foreign-currency transfer and convertibility risks.

METHODOLOGY USED

The principal methodology used in this rating was Sovereign Bond Ratings published in September 2008. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

The Global Scale Credit Ratings on this press release that are issued by one of Moody's affiliates outside the EU are endorsed by Moody's Investors Service Ltd., One Canada Square, Canary Wharf, London E 14 5FA, UK, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody's office that has issued a particular Credit Rating is available on www.moodys.com.

For ratings issued on a program, series or category/class of debt, this announcement provides relevant regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides relevant regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides relevant regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

Moody's considers the quality of information available on the rated entity, obligation or credit satisfactory for the purposes of issuing a rating.

Moody's adopts all necessary measures so that the information it uses in assigning a rating is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process.

Please see Moody's Rating Symbols and Definitions on the Rating Process page on www.moodys.com for further information on the meaning of each rating category and the definition of default and recovery.

Please see ratings tab on the issuer/entity page on www.moodys.com for the last rating action and the rating history. The date on which some ratings were first released goes back to a time before Moody's ratings were fully digitized and accurate data may not be available. Consequently, Moody's provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information.

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Jaime C. ReuscheAsst Vice President - Analyst Sovereign Risk Group Moody'sInvestors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653Bart Oosterveld MD - Sovereign Risk Sovereign Risk Group JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 Releasing Office: Moody's Investors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653(C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

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