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Moody’s Upgrades Armenia’s Ratings


Armenia - A view of the center of Yerevan and Mount Ararat, February 17, 2013.

Moody’s Investors Service has revised upward its credit ratings for Armenia and forecast continued economic growth in the country.

In a statement issued on Tuesday, the ratings agency said it has upgraded 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,” said the statement.

“Moody's has concurrently raised Armenia's long-term local currency bond and deposit ceilings to Baa2 from Baa3,” it added. “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.”

Moody’s also offered a positive outlook for the Armenian economy, saying that it should grow by at least 5.5 percent annually in the coming years. “The sectors that have contributed to 2018 growth will continue expand solidly, such as tourism, information technology (IT), and light manufacturing, including of textiles,” it said. “In particular, ongoing investments in hotels will raise tourism capacity, new textile factories are being built, and the number of IT sector companies and projects are growing rapidly.”

Moody’s was particularly encouraged by the long-running rapid expansion of the Armenian IT industry, saying that it is “providing a strong foundation for the development of a skills- and knowledge-based economy.”

The Western agency went on to praise the Armenian authorities’ fiscal and monetary policies contributing to macroeconomic stability. “Moody's expects Armenia's government debt burden to decline steadily from currently moderate levels of around 51 percent of GDP as of the end of 2018,” it said.

Prime Minister Nikol Pashinian was quick to seize upon the ratings upgrades. “This is a really important development which increases international confidence in the Armenian economy and makes our country considerably more attractive to investors,” he wrote on his Facebook page.

Bagrat Asatrian, an economist who ran the Central Bank of Armenia in the 1990s, likewise stressed the importance of the Moody’s statement. “In essence it reflects positive changes that have occurred in our economy,” he told RFE/RL’s Armenian service.

Asatrian singled out the easing of the debt burden anticipated by Moody’s. “For many years our public debt grew,” he said. “That growth has stopped and we have even started having a reduction [in the debt.]”

But another economist, Suren Parsian, reacted more cautiously, saying that Moody’s had already assigned the same ratings to Armenia in 2015. Parsian also said that steady and robust growth forecast by the agency will not necessarily materialize

“If we want to have dynamic growth in the medium and long terms we have to revise our economic system and institutions, which has not been done,” he said.

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