On 27 August, Moody's Investors Service upgraded the Government of Armenia's local and foreign currency long-term issuer and foreign currency senior unsecured debt ratings to Ba3 from B1. The outlook has been changed to stable from positive, reported tert.am.

The decision to upgrade the rating is driven by Moody's assessment that the increasing diversification of growth drivers, coupled with a lengthening track record of stabilising macroeconomic policy raised Armenia's economic resilience. The stable outlook reflects balanced risks. On the upside, the strengthened commitment to and ongoing implementation of reforms, supported by development partners, might have the potential to raise Armenia's institutional credibility and government effectiveness over time. On the downside, notwithstanding increasing economic resilience and a strengthening government balance sheet, limited buffers continue to expose Armenia's credit profile to external shocks.

Moody's has concurrently raised Armenia's long-term local currency bond and deposit ceilings to Baa2 from Baa3. The long-term foreign currency bond ceiling and long-term foreign currency deposit ceiling has also been raised to Ba1 from Ba2 and B1 from B2, respectively. The short-term foreign currency bond and deposit ceilings remain unchanged at Not Prime.

The Armenian Prime Minister Nikol Pashinyan was delighted by the changes of his country’s investment rating. “The decision of Moody’s is based on the factor that Armenia diversifies its economy, as well as on the macroeconomic stability that has been retained for a long period, which raises Armenia’s economic immunity. Moody’s noted in its report that real GDP growth in Armenia will remain high in the mid-term period. The development of the IT sector is of particular importance, and the sector is the main condition for a knowledge-based economy. This is a truly major event that increases international confidence in Armenia’s economy and significantly improves the investment attractiveness of the country,” he wrote on his Facebook page.

Two weeks earlier, Moody’s delegation visited Armenia in order to get acquainted with the developments in the country’s economy (Caucasus Watch reported).