IHS Global Insight Cuts Outlook On Armenian Sovereign Rating To Stab

IHS GLOBAL INSIGHT CUTS OUTLOOK ON ARMENIAN SOVEREIGN RATING TO STABLE
Venla Sipila

World Markets Research Centre
Dec 18 2008

In our fourth-quarter sovereign risk review round, we have cut
the outlook on our rating for Armenia to stable from positive,
while retaining the assessment at 55 (B+ on the generic scale). This
adjustment reflects increased uncertainty related to the outlook for
foreign currency inflows. The availability of foreign investment may
become stretched as global growth weakens and international liquidity
remains tight. Similarly, the outlook for continued strong remittance
inflows may suffer due to similar reasons, and not least because these
are to a high degree dependent on economic fortunes of Russia, where
economic outlook has recently also clearly deteriorated. Moreover,
with weakening global growth, also export prospects have deteriorated
further from an already relatively poor position. Financing of the
wide current-account gap remains dependent on investment inflows,
and thus, the risk of increasing liquidity pressures remains relevant.

Significance:Armenia’s sovereign risk rating remains supported
by the authorities so-far strong reform commitment and relatively
prudent macroeconomic policies. However, the rating signals high
payments risk. In the current challenging international financial
and economic environment, developments in Armenia’s sovereign
creditworthiness warrant close monitoring. For example, further
indications of deterioration in the liquidity gap would lead us to
shift the outlook to negative.

From: Emil Lazarian | Ararat NewsPress

Emil Lazarian

“I should like to see any power of the world destroy this race, this small tribe of unimportant people, whose wars have all been fought and lost, whose structures have crumbled, literature is unread, music is unheard, and prayers are no more answered. Go ahead, destroy Armenia . See if you can do it. Send them into the desert without bread or water. Burn their homes and churches. Then see if they will not laugh, sing and pray again. For when two of them meet anywhere in the world, see if they will not create a New Armenia.” - WS