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Armenia's Rating Outlook Raised To 'positive' - Fitch


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ARMENIA'S RATING OUTLOOK RAISED TO 'POSITIVE' - FITCH

 

Forbes

May 2 2007

 

LONDON (Thomson Financial) - Fitch Ratings revised the outlook

on Armenia's foreign and local currency issuer default ratings

to 'positive' from 'stable' and affirmed the ratings at 'BB-' on

expectations that economic growth will be sustained on disciplined

macroeconomic policies and structural reforms.

 

The ratings agency also affirmed the country ceiling at 'BB' and the

short-term foreign currency rating at 'B'.

 

Armenia's ratings are supported by an impressive economic performance

with the economy expanding by more than 11 pct each year, since 2000

while annual consumer price inflation has remained below 3 pct. The

ratings and outlook are also supported by a medium-term fiscal policy

framework and prudent budgetary policies, Fitch said.

 

However, Fitch warned that Armenian policymakers face significant

challenges in sustaining strong and balanced economic growth against

the backdrop of strong upward pressures on the exchange rate, rapid

expansion of private credit and construction activity, while also

anchoring inflation expectations under the recently introduced direct

inflation targeting regime.

 

In addition, Fitch said upcoming parliamentary elections and

presidential elections in 2008 could potentially complicate

macroeconomic policy management, although it does not expect any

material impact to economic or foreign policy.

 

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