Reduction of rating in Armenia by the agency Moody’s was not unexpected for Finance Ministry of Armenia

23.11.2011 16:17
Reduction of rating in Armenia by the agency Moody’s was not unexpected for Finance Ministry of Armenia

YEREVAN, November 23. /ARKA/. Reduction of rating in Armenia by international rating agency Moody’s was not unexpected for the Armenian finance Ministry, informed Armenian Public TV Channel citing the words of Finance Minister Vache Gabrielyan.

The agency Moody’s decreased the forecast of long-term rating of default issuer of Armenia in foreign and national currency (Ва2) from “stable” to “negative”.

Moody’s considers that the reason of worsening of sovereign rating of Armenia into “negative” are the increasing risks of economic growth delay of European countries and Russia where 58% of goods are exported from Armenia. The agency also considered the dependence of Armenian economy from export, money transfers and direct foreign investments, particularly Russian investments which are risky for the position of Armenia in the foreign market.

The second reason of worsening Moody’s forecast is the risk of Armenia’s accession to the deepened debt metrics in other economically difficult period.

Gabrielyan said that the increase of foreign debt of the country and the risks related to the export of Armenian goods in European and Russian markets are taken into account in the state budget of Armenia for 2012.

He said that economic decline recorded in October 2011 in Armenia has a seasonal character compared to September 2011.

By the assessments of Moody’s, in 2011 Armenia expects high deficit in the state budget (about 11% in GDP) and increase of the indicator of state debt to 35% in GDP compared to pre-crisis 14% in GDP in 2008.

Moody’s reviewed the forecast from “stable” to “negative” by country ceiling of currency deposits of Armenia - “Ba3″. Country ceiling by debt liabilities in national currency was reduced to “А3″ to “Baa1″. Country ceiling by debt liabilities in foreign currency was approved on the level of “Baa3″ with “stable” forecast.

Rating agency can return the forecast by the ratings of Armenia to “stable” level in case of reduction of risks in the country, though in short-term and mid-term perspectives the possibility of such a review is provided to analysts of Moody’s very low. -0-


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