Baku, Azerbaijan, Feb.2
By - Trend:
Fitch Ratings has downgraded Armenia's Long-term foreign and local currency Issuer Default Ratings (IDRs) to "B+" from "BB-", the Outlook is Stable, RIA Novosti news agency reported with reference to the official website of the agency.
"The issue ratings on Armenia's senior unsecured foreign and local currency bonds have also been downgraded to "B+" from "BB-". The Country Ceiling has been revised to "BB-" from "BB" and the Short-term foreign currency IDR affirmed at "B," said the message.
"Armenia is highly exposed to the severe economic downturn in Russia (BBB-/Negative), which will weigh heavily on Armenia's balance of payment and growth prospects," according to Fitch. "The economy is expected to fall into a mild recession in 2015, with risks tilted to the downside given the worsening economic situation in Russia and likely negative impact on external imbalances and further depreciation pressures."
"The current account deficit is expected to widen again in 2015 as a result of a sharp reduction in both remittances inflows and export demand from Russia," said the message. "Remittances amount to about 15 percent of Armenia's GDP and fell by about 30 percent during the last months of 2014 as 90 percent of their total volume come from Russia."
"The impact of the fall in oil prices on imports will be largely outweighed by the strengthening of the dollar and a decline in international prices of key Armenian exports," Fitch said. "Mining exports, especially copper, account for about half of Armenia's goods exports."
Earlier, on Jan.16, Moody's International Ratings Agency downgraded Armenia's issuer and government bond rating to Ba3 from Ba2, and changed the outlook to negative from stable.