The rating agency "Fitch" has improved the sovereign rating of the Republic of Armenia for issuing long-term liabilities in foreign currency and national currency, changing it from "B+" to "BB-" with a "stable" outlook.
The improvement in Armenia's ranking to a solid macroeconomic and fiscal policy framework, as well as a credible commitment to reforms.
After the upheavals of recent years, Armenia has experienced a significant recovery and high growth, and it is expected that this positive trend will continue in the future. The economic growth is estimated to be 7.2% in 2023, following the 12.6% economic growth registered in 2022, and the economic growth potential is predicted to increase further.
The improvement of Armenia's sovereign rating was also promoted by the fact that, despite the appreciation of the Armenian dram, the dynamics of the export of goods and services are positive. Fitch expects that per capita income in 2025 will double from the level of 2021.
"The government's debt-to-GDP ratio decreased sharply from 60.2% in 2021 to 47.6% in 2022. This reduction was attributed to high economic growth, dram appreciation, and fiscal consolidation implemented by the RA government. The agency expects debt to stabilize at a low level of around 47.6% between 2023 and 2025.
The external position of the economy has also improved: the surplus of the current account of the balance of payments was 0.8% of GDP in 2022, compared to a deficit of 3.7% in 2021, which is due to high demand for exports of goods and services and remittances.
In addition, due to a stable external position, external debt decreased to 24.6% of GDP in 2022 compared to 44.5% in 2021 and is expected to reach 16.1% of GDP in 2025.