On February 27, the international rating agency Fitch Ratings published its assessment of the impact of the Russian-Ukrainian war on the credit rating of developing countries in Europe.

"The sovereign rating of seven countries in Eastern and Central Europe remains negative, as was the case during the Covid-19 pandemic," the report stated. Fitch Ratings reported that negative outlooks for North Macedonia (BB+) and Romania (BBB-) date back to before the outbreak of hostilities in Ukraine in February 2022. The negative outlook for the Czech Republic (AA-), Estonia (AA-), Hungary (BBB), and Slovakia (A) reflects the risks of the conflict-driven energy crisis and fiscal policy.

"Together with the downgrade of the ratings of Ukraine and Belarus in 2022, this is an indicator of a fundamental deterioration in lending conditions created by the war for the countries of the region," the agency’s report added.

Meanwhile, Fitch noted that 2022 was a very good year for the countries of the South Caucasus and Central Asia. "The unexpected outflow of human resources and capital from Russia, Ukraine, and Belarus to Georgia (BB) and Armenia (B+) boosted the macroeconomic and fiscal performance of both republics," the organization stated.

"For Azerbaijan, despite the negative impact of the conflict on oil and gas prices for energy importers, significantly higher energy costs have strengthened the fiscal and trade balances of exporters such as Azerbaijan (BB+) and Turkmenistan (B+)," it added.

"We changed the outlook for Azerbaijan in October 2022 and the outlook for Turkmenistan earlier this month to positive," the rating agency noted.

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