Moody's changes Armenia's sovereign outlook to negative
Azerbaijan, Baku, Nov.22 /Trend /
Moody's Investors Service has today changed to negative from stable the outlook on Armenia's Ba2 government foreign and local currency issuer ratings, the Agency's official website reported.
Moody's decision to change the outlook on Armenia's sovereign ratings to negative is primarily driven by the country's ongoing economic vulnerability to the weaker growth prospects in Europe and Russia, which together account for 58 percent of Armenia's export market.
Concurrent with this action, Moody's has revised to negative the outlook on the Ba3 country ceiling for foreign-currency deposits
At the same time, the country ceiling for local-currency debt was downgraded to Baa1 from A3.
The country ceiling for foreign-currency debt was affirmed at Baa3 and its outlook remains stable.
Moody's notes that the country is now faced with a large current account deficit (estimated to be 11 percent GDP in 2011) and a government external debt ratio that has doubled to 35 percent in 2011 from 14 percent of GDP in 2008.
Although unlikely in the short-to-medium term, Moody's would consider changing the rating outlook on Armenia back to stable in the event of a dissipation of the risks posed by the country's external vulnerability to low growth prospects among its main trading partners.