2024-07-27 22:06:35
The international rating agency Fitch has confirmed Armenia’s credit rating at BB- with a stable outlook.
As reported by Day.Az with reference to Armenian media, in 2024 the budget deficit is expected to grow to 4.5% of GDP, compared to 1.9% in 2023. For comparison, the average for countries with a BB- rating is 2.6%.
The agency also reports a decrease in Armenia’s foreign exchange reserves. If in August 2023, Armenia’s foreign exchange reserves amounted to $4.2 billion, then by June 2024 they had decreased to $3.3 billion. These reserves would hypothetically be enough to cover external payments (loans and imports) for 2.8 months, while the average for countries with a BB rating is 4.5 months.
However, it is taken into account that possible external shocks can be softened by the floating (unregulated) exchange rate of the dram, which will fall with a lack of currency inflow. This will make imported goods more expensive, but will increase the competitiveness of exports.
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