YEREVAN, September 2. /ARKA/. Citing the Moody’s Investors Service affirmation of the Government of Armenia’s Ba3 local and foreign currency long-term issuer ratings and foreign currency senior unsecured rating with the outlook remaining stable, Finance Minister Tigran Khachatryan said it is a very important signal for international investors.
According to the Moody’s latest rating, the affirmation of the Ba3 ratings is driven by the credit profile’s resilience to the significant shocks of the coronavirus pandemic and geopolitical and domestic political tensions, and Moody’s expectations that growth and fiscal strength will recover over the medium term.
It said the fiscal profile in particular has proven resilient and will stabilize over the medium term, with debt consolidation expected from 2021 onward as growth and revenue rebound, and as the government adjusts expenditure downward in line with fiscal rules.
Moody’s also assesses that the 2020 ceasefire agreement with Azerbaijan and the June snap parliamentary election have reduced near-term political risks, supporting economic recovery and minimizing the impact to Armenia’s fundamental growth outlook. According to it, external deficits drive currency valuation risks that can transmit to fiscal strength and financial stability, although external buffers have increased to withstand these potential shocks.
Khachatryan added that although in 2020 the public debt-GDP ratio increased to 63.5%, however, Moody’s points to the importance of the policy of the Armenian government to reduce this indicator in the next 5 years. The total public debt of Armenia as of May 31, 2021 stood at $8 billion 816 million. -0-
