A few weeks after Fitch Ratings had announced a comparable improvement, S&P Global Ratings upgraded the Armenian government's credit outlook from “stable” to “positive." Both agencies cited the influx of thousands of Russians last year as a major factor. 

“The war in Ukraine triggered strong inflows of labor and capital from Russia to Armenia, which boosted Armenia’s real GDP growth," S&P said in a statement, adding that there is a higher probability that Armenia's prospective growth rate and its fiscal and external balance sheets will continue to be stronger than they were before the war.

In line with Fitch’s earlier prediction that many new immigrants will stay in Armenia for at least two to three years, S&P noted it is “unlikely there will be a sharp reversal in financial and labor inflows to Armenia in the next 12 months.”

S&P expects Armenia’s GDP to grow by 4.0% in 2023, whereas Fitch predicts significantly higher growth at 6.3%.

S&P kept Armenia’s long-term and short-term sovereign credit ratings at B+ and B, respectively. Fitch also confirmed the long-term foreign currency issuer default rating for Armenia at B+. All three ratings indicate a relatively high level of credit risk.

Read also: Fitch rates Armenia at "B+"