The international rating agency S&P has affirmed Russia’s long-term foreign currency rating at BBB- / A-3 with a stable outlook. At the same time, S&P revised its forecast for Russia’s GDP growth from 3.3% to 3.7%.
“We confirm our rating BBB- / A-3 in foreign currency and BBB / A-2 in local currency. For Russia. The outlook is stable, ”S&P said (quoted from Prime). According to the rating agency, the stable outlook indicates expectations that the country’s fiscal and external balance of payments will be able to offset the risks to fiscal or financial stability caused by the impact of the pandemic and the possibility of additional sanctions.
S&P points to continued high levels of uncertainty amid the development of the pandemic and new international sanctions, while noting that the recovery in domestic demand in the first half of this year went faster than expected. In this regard, S&P revised its forecast for Russia’s GDP growth from 3.3% to 3.7%. According to the agency, the recovery could support growth in real wages and a recovery in oil production amid easing OPEC + production restrictions.
The rating agency expects a reasonable degree of macroeconomic policy continuity in the coming years, even if the ruling party loses its constitutional majority in elections in September. According to S&P, the possibility of President Vladimir Putin to run in 2024 “slightly improves the visibility of political transformation until 2024, but does not reduce the uncertainty about the succession when the president leaves office.”
On July 9, the international rating agency Fitch retained Russia’s long-term foreign currency credit rating at investment grade BBB with a stable outlook. Fitch noted that risks of US sanctions against Russia remain, but widespread restrictions are unlikely.
.