Fitch affirms Armenia at 'B+'; outlook stable

YEREVAN, SEPTEMBER 7, ARMENPRESS. Fitch Ratings has affirmed Armenia's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'B+' with a Stable Outlook.

Armenia's 'B+' IDRs reflect strong per-capita income, governance and business environment indicators relative to peers, as well as a robust macroeconomic and fiscal policy framework and credible commitment to reform, underpinned by IMF support.

The Ukraine conflict and sanctions on Russia have triggered a substantial migration of Russian, Ukrainian and Belarusian citizens to Armenia since March, with visitor numbers rising 515% yoy in 1H22. This is further supported by a 200% yoy increase in money transfers from Russia to Armenia in 1H22. A large proportion of the migrants are believed to be highly educated professionals, particularly from the information and communications technology sector. These trends helped boost growth 13% yoy in 2Q22 (1Q22: 8.7% yoy) and should provide momentum in 2H22. Fitch has upped its real GDP growth projections for 2022 to 6.4% as remittances boost personal consumption, and export performance (particularly to Russia) holds up. Fitch expects growth will average 4.7% in 2023-24.