MOODY’S warned Yerevan: Armenia’s rating may fall due to Nagorno-Karabakh conflict

Leading international rating agency, Moody’s Investors Service, published a report on Armenia, confirming the previous rating of the country (B1), but at the same time specifying the threats facing it, informs

Moody’s notes that the economy of Armenia is being restored in 2017 and the country is pursuing an “acceptable” monetary policy. “However, external risks remain visible” the report says.

Experts point to the low economic sustainability of Armenia, its close ties with Russia, as well as the dependence of the country on external financing. Special mention is made of “the geopolitical contradictions with neighboring Azerbaijan”.

“… A substantial reduction in geopolitical risks could increase the creditworthiness, as well as strengthen the institutional structures of Armenia” the report states.

Furthermore, it is noted that the prospective downgrade of the country’s rating may occur due to more than expected deterioration in the economic situation in Russia, which in turn will negatively affect the size of foreign investments in Armenia and the state of its foreign exchange reserves.

The report’s authors also emphasize that the growth of geopolitical risks related to the unresolved conflict with Azerbaijan over Nagorno-Karabakh may also lead to a deterioration of Armenia’s credit rating.


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