International rating agency Moody's Investor Service has upgraded the Government of Armenia's local and foreign currency long-term issuer and foreign currency senior unsecured debt ratings to Ba3 from B1. The outlook has been changed to stable from positive.
The decision to upgrade the rating is driven by Moody's assessment that the increasing diversification of growth drivers, coupled with a lengthening track record of stabilising macroeconomic policy, raises Armenia's economic resiliency. Ongoing measures to strengthen government finances will also likely gradually restore some of the sovereign's fiscal strength that eroded over 2014-17.
The agency’s report informs that the stable outlook reflects balanced risks. The ongoing implementation of reforms has the potential to raise Armenia's institutional credibility and government effectiveness over time.
Moody's has concurrently raised Armenia's long-term local currency bond and deposit ceilings to Baa2 from Baa3. The long-term foreign currency bond ceiling and long-term foreign currency deposit ceiling have also been raised to Ba1 from Ba2 and B1 from B2, respectively. The short-term foreign currency bond and deposit ceilings remain unchanged.