YEREVAN, June 29./ARKA/.International rating agency Fitch confirmed long-term issuer default rating of Armenia in foreign and national currency at BB-, the forecast on rating is “stable,” according to the report “Sovereign Review and Outlook” report.
Armenia at BB- looks like more vulnerable to external shocks as the current account deficit is 11% of GDP, the source says.
According to Armenia’s Ministry of Finance, ratio of the current account to GDP of Armenia was 11% in 2011, and it is projected to drop to 10.8% in 2012, 9.9% in 2013, and 9% of GDP in 2014.
Drop in oil prices will create risks for exporters from the CIS and other states, particularly for Baltic countries and Armenia which strongly depend on export and remittances from Russia.
At the same time Fitch expects slowdown in global GDP growth from 2.7% of the last year to 2.2% in 2012. However by 2013 and 2014 economy will have started growing and will have reached 2.8% in 2013 and 3.1% in 2014. The risks are reduced.
BB- level means that there is a possibility for credit risks rise, especially as negative economic changes may happen.
However, along with this companies may have access to alternative resources in business or finance spheres, which will enable them to operate their financial commitments. Securities which receive this level of rating are not securities of investment category. Ratings can be complemented by “+” or "-" marks for defining some particular position within main rating categories. —0-