YEREVAN, July 31. /ARKA/. Armenia has had a strong rebound from successive shocks in recent years since its downgrade in 2020, Fitch Ratings said as it has upgraded Armenia's Long-Term Foreign-Currency Issuer Default Rating (IDR) to 'BB-' from 'B+'. The Outlook is Stable.  

Fitch said also it expects this dynamism to continue in light of an extraordinary inflow of migrants.

Since the start of the Ukraine conflict in 2022, an estimated 50,000-65,000 immigrants (equivalent to 2.2% of Armenia's pre-conflict population) from Russia, Ukraine and Belarus have settled in the country.

This supported strong growth of 12.6% in 2022, and Fitch expects the economy to grow by 7.2% in 2023, 5.9% in 2024 and 4.5% in 2025.

Fitch also considers geopolitical risks from Azerbaijan to have increased since the start of the year. As of July, a seven-month long Azerbaijani blockade of the Lachin Corridor in the disputed Nagorno-Karabakh region is ongoing, and there have been multiple deadly military clashes on the border. Peace talks between the two countries continue, but in our view, are unlikely to yield a lasting peace agreement in the absence of territorial adjustments that may be politically difficult for Armenia to accept.

Fitch believes that in the event of a military conflict with Azerbaijan over Nagorno-Karabakh, fighting will largely be limited to the disputed region, and broader macroeconomic implications for Armenia will be limited. -0-