On February 23, 2024, the Standard and Poor's rating agency reaffirmed the sovereign "BB-"/"B" rating of the Republic of Armenia for the issuance of long-term/short-term liabilities in foreign currency and national currency, leaving the "stable" outlook unchanged.
The rating agency's maintenance of the rating is based on the country's high economic growth prospects, continued access to external financing and a reasonable macroeconomic policy framework, which has helped maintain the country's macroeconomic and financial stability in recent years, despite numerous external shocks.
The stable outlook reflects on the one hand the favorable economic growth outlook of Armenia and the maintenance of the government's debt at a stable and manageable level, and on the other hand, the existing risks of the external balance of payments and geopolitical risks.
The agency addressed the challenges of Armenia's economy related to the flows of people forcibly displaced from Nagorno-Karabakh and migrants from the Russian Federation, as well as regional geopolitical uncertainty. It is noted that, in the absence of an increase in geopolitical tensions, Armenia's economic prospects remain strong, reflecting higher productivity mainly due to the flow of capital and labor into the IT sector.
Referring to the average economic growth of 10.7% in 2022-2023, which ranks as the third highest among the countries it assesses, the agency predicts a 6.2% economic growth for Armenia in 2024. This slowdown is attributed to a decrease in demand from major foreign trading partners and a reduction in the inflow of Russian migrants and capital. However, external factors are expected to be countered by increased domestic consumption, public investment in infrastructure, and private investment aimed at, among other goals, the integration of the forcibly displaced people of Nagorno-Karabakh.