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Fitch Scores has affirmed Armenia’s Lengthy-Time period Overseas-Foreign money Issuer Default Score (IDR) at ‘B+’ with a Steady Outlook, the company stated on Friday.
Armenia’s ‘B+’ IDRs replicate robust per-capita earnings, governance and enterprise surroundings indicators relative to friends, in addition to a strong macroeconomic and financial coverage framework and credible dedication to reform, underpinned by IMF help. Set towards these strengths are a excessive share of foreign-currency denominated public debt, comparatively weak exterior funds, and geopolitical dangers.
“The Ukraine battle and sanctions on Russia have triggered a considerable migration of Russian, Ukrainian and Belarusian residents to Armenia since March, with customer numbers rising 515% yoy in 1H22. That is additional supported by a 200% yoy improve in cash transfers from Russia to Armenia in 1H22. A big proportion of the migrants are believed to be extremely educated professionals, notably from the knowledge and communications expertise sector. These developments helped enhance progress 13% yoy in 2Q22 (1Q22: 8.7% yoy) and will present momentum in 2H22. Fitch has upped its actual GDP progress projections for 2022 to six.4% as remittances enhance private consumption, and export efficiency (notably to Russia) holds up. Fitch expects progress will common 4.7% in 2023-24,” Fitch stated.
Improved confidence usually authorities debt/GDP returning to a agency downward path over the medium time period, in addition to a sustained enchancment in exterior indicators are among the many elements that might, individually or collectively, result in constructive score motion.
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