News State macroeconomics 04 December 2019
The country’s credit rating did not change — Ukraine remains very risky
According to Interfax-Ukraine, Moody’s has changed the outlook on the Government of Ukraine’s ratings to positive from stable.
At the same time, Ukraine’s long-term issuer and senior unsecured ratings have been affirmed at Caa1, which, according to Moody’s classification, indicates a high credit risk.
“The affirmation of Ukraine’s Caa1 ratings reflects its — while showing signs of improvement — significant external vulnerability,” reads the agency’s review.
According to Moody’s, the key drivers for the change in the outlook to positive are:
- the rebuilding of Ukraine’s foreign exchange reserves which reduces external vulnerability;
- the improvement of Ukraine’s macroeconomic stability;
- the prospect for renewed reform momentum which strengthens the country’s economic resilience.
Moody’s analysts also underline the need of continued market access in the context of significant external debt repayments due over the coming years in the absence of a new IMF program.
As reported earlier, S&P rating agency raised Ukraine’s foreign and local currency sovereign credit rating from B- to B.
Meanwhile, Fitch projects a 3.4% GDP growth in Ukraine in 2019 against 4.5% in Q2.