Fitch affirms Armenia’s rating at ‘B+’; outlook stable

YEREVAN, July 4. /ARKA/. Fitch Ratings has affirmed Armenia’s Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDR) at ‘B+’ with Stable Outlook.

The rating agency’s official website reports that the issue ratings on Armenia’s senior unsecured foreign-currency bonds have also been affirmed at ‘B+’. The Country Ceiling has been affirmed at ‘BB-‘ and the Short-Term Foreign- and Local-Currency IDRs at ‘B’.

Armenia’s ratings are supported by strong income per capita and governance indicators relative to peers, a credible monetary policy framework, reduced external imbalances and a favorable government debt structure. The ratings are constrained by high net external debt, high fiscal deficits leading to a rising public debt burden, exposure to external shocks, a highly dollarized banking sector and tensions in relations with some neighboring countries.

Fitch says that the country is continuing to adjust following the external shock in 2014-15 from the drop in commodity prices and remittances from Russia. GDP growth has recovered strongly reaching 6.5% in 1Q17, after the sharp deceleration to 0.2% in 2016. Fitch has revised its growth projection up to 3.4% for 2017, with upside risks from stronger than expected public sector capital spending and faster export growth. Growth could accelerate further in 2018-19, but improving the country’s medium-term growth prospects is likely to require further progress in improving the investment climate, as total investment is low at 18.4% of GDP.

Fitch experts say Armenia’s exports are growing strongly, which helped its current account deficit to remain roughly stable at 2.7% of GDP in 2016. A favorable international environment characterized by a recovery in commodity prices, improved export diversification and stabilization of the Russian economy will benefit export and remittances receipts, leading the current account deficit to average 2.1% in 2017-2018, almost half the expected ‘B’ median. Lower current account deficits help mitigate external vulnerabilities given Armenia’s small size and commodity dependence, as well as helping to support stabilization of the country’s high net external debt of 46.7% of GDP vs 20% for the rating category median.

The Stable Outlook reflects Fitch’s assessment that upside and downside risks to the rating are currently balanced. Nonetheless, the following risk factors could, individually or collectively, trigger positive rating action:

– A downward trajectory in the government debt-to-GDP ratio.

– Faster growth that supports convergence towards income levels of higher rated sovereigns without increasing macroeconomic imbalances.

– A sustained improvement in the external balance sheet.

The following risk factors could individually or collectively, trigger negative rating action:

– Continued increased in the government debt to GDP ratio, for example due to failure to achieve fiscal consolidation and/or growth underperformance.

– A sustained fall in foreign exchange reserves.

– An escalation in the Nagorno-Karabakh conflict if it were to have a material impact on the Armenian economy or public finances.

Fitch affirmed Armenia’s rating at “B+” with “Stable” outlook. –0—-

spot_img

POPULAR

Moody’s affirms Converse Bank’s ratings and changes outlook to positive from stable

Moody's Ratings has affirmed Converse Bank's long-term deposit ratings at Ba3 and changed the outlook to positive from stable.

Euro continued to rise against the Armenian dram, while the dollar and ruble weakened: Central Bank

The average market exchange rate for the US dollar against the Armenian dram, formed on the Armenian foreign exchange market, fell by 0.87 points on August 5, 2026, compared to August 4, to 366.14 drams.

Head of the Union of Banks of Armenia did not rule out consolidation of the Armenian banking market

Daniel Azatyan, Chairman of the Union of Banks of Armenia, believes the current number of commercial banks in the country is optimal, but theoretically allows for market consolidation.

Armenia to prepare action plan to implement MONEYVAL recommendations — Union of Banks

Armenia's interdepartmental commission will soon present for discussion an action plan to implement MONEYVAL recommendations, said Daniel Azatyan, Chairman of the Union of Banks of Armenia, in response to a question from ARKA news agency.

Armenian bank assets grew by 8.1% in the first half of the year, reaching 13.8 trillion drams — Union of Banks of Armenia

The total assets of Armenian banks as of June 30, 2026, amounted to 13.8 trillion drams, an increase of 8.1% since the beginning of the year, announced Daniel Azatyan, Chairman of the Union of Banks of Armenia.

LATEST NEWS

spot_imgspot_imgspot_img