28/08/2019 12:56
Moody’s upgrades Armenia's rating to Ba3, from positive to stable
Moody's Investors Service has upgraded the Government of Armenia's local and foreign currency long-term issuer and foreign currency senior unsecured debt ratings to Ba3 from B1. The outlook has been changed to stable from positive.
The decision to upgrade the rating is driven by Moody's assessment that the increasing diversification of growth drivers, coupled with a lengthening track record of stabilising macroeconomic policy, raises Armenia's economic resiliency. Ongoing measures to strengthen government finances will also likely gradually restore some of the sovereign's fiscal strength that eroded over 2014-17.
The stable outlook reflects balanced risks. On the upside, the strengthened commitment to and ongoing implementation of reforms, supported by development partners, have the potential to raise Armenia's institutional credibility and government effectiveness over time. On the downside, notwithstanding increasing economic resilience and a strengthening government balance sheet, still limited buffers continue to expose Armenia's credit profile to external shocks.
Moody's has concurrently raised Armenia's long-term local currency bond and deposit ceilings to Baa2 from Baa3. The long-term foreign currency bond ceiling and long-term foreign currency deposit ceiling have also been raised to Ba1 from Ba2 and B1 from B2, respectively. The short-term foreign currency bond and deposit ceilings remain unchanged at Not Prime. These ceilings typically act as a cap on the ratings that can be assigned to the obligations of other entities domiciled in the country.