PRIME MINISTER SAYS FITCH RATINGS’ DECISION TO HAVE ADVERSE IMPACT ON ARMENIA’S PRIVATE SECTOR
ARKA
Aug 27, 2009
YEREVAN, August 27, /ARKA/. Armenian Prime Minister Tigran Sargsyan
said August 26 the decision of the Fitch Ratings to downgrade Armenia’s
long-term foreign and national currency Issuer Default Ratings to "BB-"
from "BB" will have an adverse effect on the country’s private sector.
He said although the decision has not brought about extra risks
from the perspective of the government’s performance, it has caused
unfavorable conditions for the private sector that will be facing
serious difficulties in attracting long-term and cheap loans from
foreign partners.
His remarks came during a meeting with activists of a youth movement
called Miasin (Together) that took place in a village near Lake Sevan.
On August 13 the Fitch Ratings downgraded Armenia’s long-term foreign
and local currency Issuer Default Ratings (IDR) to ‘BB-‘ from ‘BB’,
leaving the outlooks stable. The agency also downgraded the Country
Ceiling to ‘BB’ from ‘BB+’ and affirmed the short-term foreign currency
IDR at ‘B’.
""Despite a strong policy response supported by the international
community, the severity of the shock has materially weakened Armenia’s
credit fundamentals and medium-term prospects," said Andrew Colquhoun,
Director in Fitch’s Sovereigns Group. "Unlocking Armenia’s economic
potential and restoring strong a nd sustained growth necessary to
reduce poverty and raise incomes will be much harder as a result of
the crisis."
The prime minister reminded yesterday that the government has secured
over $1.1 billion in emergency loans from the IMF ($305) , the World
Bank ($60 million) , the Asian Development Bank ($80 million), Russia
($500 million) and other foreign sources to cope with the fallout
from the global credit crunch. He said this money will be spend on
financing the budget this and next year.
Official statistics shows that the Armenian economy contracted by 18.6
percent in the first seven months of the year. The Armenian government
has predicted that the full-year decline will ease to 12-14% thanks
to its anti-crisis measures.
From: Emil Lazarian | Ararat NewsPress
