On July 28, 2023, Fitch Ratings raised Armenia’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to ‘BB-‘ from ‘B+’, with a Stable Outlook.
Fitch Ratings has upgraded Armenia’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to ‘BB-‘ from ‘B+’ with a Stable Outlook. The upgrade is supported by robust economic growth driven by an influx of migrants, resulting in a strong rebound and anticipated continued dynamism. Government debt/GDP has stabilized at a low level, and fiscal performance remains stable.
The external balance sheet has improved, with a surplus in the current account and declining net external debt. The ‘BB-‘ IDRs also reflect Armenia’s robust macroeconomic and fiscal policy framework, commitment to structural reforms, and favorable per capita GDP. However, geopolitical risks from tensions with Azerbaijan have increased, and rising territorial disputes pose potential challenges.
Despite these risks, the strong dram and lower inflation contribute to a positive economic outlook. Armenia also benefits from solid external creditor support and a stable, dollarized banking sector. ESG factors highlight governance concerns, including political stability and rights, the rule of law, institutional quality, and control of corruption.