Structural changes of Armenia’s economy as a base for Moody’s assessment

YEREVAN, AUGUST 28, ARMENPRESS. Moody's Investors Service ("Moody's") has upgraded on August 27 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, Armenpress reports citing Moody’s website.

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 stabilizing macroeconomic policy, raises Armenia's economic resiliency. The strengthened commitment to and ongoing implementation of reforms, supported by development partners, have the potential to raise Armenia's institutional credibility and government effectiveness over time.

Moody's expects real GDP growth in Armenia to remain high over the medium term, hovering around 5.5-6% over the next few years. The sectors that have contributed to 2018 growth will continue expand solidly, such as tourism, information technology (IT), and light manufacturing including of textiles. In particular, ongoing investments in hotels will raise tourism capacity, new textile factories are being built, and the number of IT sector companies and projects are growing rapidly.

In addition to other research conducted by the agency, the information and data provided by the Armenian ministry of economy relating to the country’s investment environment, major hotels opened since 2018, the ministry’s state assistance programs aimed at raising productivity in agriculture sector, the timeframe of reforms existing in the Armenia-EU Comprehensive and Enhanced Partnership Agreement and etc, served as a base for the change of the outlook.