The rating agency "Fitch" has reaffirmed the sovereign "BB-" rating of the Republic of Armenia for the issuance of long-term obligations in foreign currency with a stable outlook.
Maintaining the rating is based on the country's strong macroeconomic and fiscal policy framework, guaranteed by access to finance from international lenders and the support of the International Monetary Fund.
The agency singled out Armenia's second consecutive year of high economic growth (real GDP growth in 2022 and 2023, respectively, 12.6% and 7.4%). The agency believes that maintaining labor force growth and increasing productivity through the expansion of high-productivity sectors such as information and communication technology will increase the country's potential economic growth.
The agency expects economic growth of 6% for 2024, driven by increased private sector consumption and public budget spending and investment, and the rate of economic growth will slow to 4.9% in 2025, which is higher than the 3.7% average for comparable countries.
The agency's perspective on the issue of forcibly displaced persons in Nagorno-Karabakh (NK). It mentions that measures for their integration will increase fiscal expenses in the current year. Despite increasing state revenues and stable GDP growth, the state budget deficit is projected to be 4.5% of GDP in 2024, decreasing to 2.9% in 2025.
The agency highlighted that the Government Debt/GDP ratio of 48.2% at the end of 2023 is below the 52% average for comparable countries. It expects this ratio to stabilize around 49.4% on average in 2024-2025. In addition, in line with the debt strategy, the share of AMD debt in the government's overall debt is anticipated to improve.
You can read the report at the following link.