Russian Federation's Long-Term LC and FC Ratings Raised to 'B+'; Outlook Revised to Stable
Dec 20, 2001
Standard & Poor's today upgraded its long-term local and foreign currency sovereign credit ratings on the Russian Federation to single-'B'-plus from single-'B' and affirmed its single-'B' short-term sovereign credit ratings. The outlook on the long-term ratings has been revised to stable from positive.
The upgrade reflects almost one year of continued improvement in Russia's policy environment, which has strengthened the country's economic structure and bolstered economic prospects and policy flexibility. As a result, the economy is becoming less dependant upon and vulnerable to the vagaries of the oil market in the current uncertain international environment. Economic growth (with real GDP growth estimated at about 5%) has been stronger and more broadly based in 2001 than had been expected, underpinned by strong reform momentum that started in May 2001. In particular, it is anticipated that the Nov. 28, 2001, passage of laws on judicial reform will serve to facilitate the implementation of previously legislated reforms.
Russia's strong economic and financial revival over the past three years has helped the country adjust to external shocks. However, the Russian economy is highly dependent upon oil and gas exports (22% of GDP and more than 50% of exports). The most obvious impact of the global economic slowdown on the Russian economy in 2002 will be the effect on oil prices. Continued macroeconomic prudence in the coming year (as demonstrated by the passage of the onservative 2002 budget on Dec. 14, 2001) and effective implementation of various structural reforms will be essential in the coming year to further reinforce the country's economic and financial flexibility against oil price fluctuations. LONG-TERM RATINGS RAISED TO 'B+'; OUTLOOK REVISED TO STABLE Russian Federation.
To From Long-term local currency sovereign credit rating 'B+' 'B' Long-term foreign currency sovereign credit rating 'B+' 'B' Senior unsecured debt rating 'B+' 'B' Outlook on long-term ratings Stable Positive.
The upgrade reflects almost one year of continued improvement in Russia's policy environment, which has strengthened the country's economic structure and bolstered economic prospects and policy flexibility. As a result, the economy is becoming less dependant upon and vulnerable to the vagaries of the oil market in the current uncertain international environment. Economic growth (with real GDP growth estimated at about 5%) has been stronger and more broadly based in 2001 than had been expected, underpinned by strong reform momentum that started in May 2001. In particular, it is anticipated that the Nov. 28, 2001, passage of laws on judicial reform will serve to facilitate the implementation of previously legislated reforms.
Russia's strong economic and financial revival over the past three years has helped the country adjust to external shocks. However, the Russian economy is highly dependent upon oil and gas exports (22% of GDP and more than 50% of exports). The most obvious impact of the global economic slowdown on the Russian economy in 2002 will be the effect on oil prices. Continued macroeconomic prudence in the coming year (as demonstrated by the passage of the onservative 2002 budget on Dec. 14, 2001) and effective implementation of various structural reforms will be essential in the coming year to further reinforce the country's economic and financial flexibility against oil price fluctuations. LONG-TERM RATINGS RAISED TO 'B+'; OUTLOOK REVISED TO STABLE Russian Federation.
To From Long-term local currency sovereign credit rating 'B+' 'B' Long-term foreign currency sovereign credit rating 'B+' 'B' Senior unsecured debt rating 'B+' 'B' Outlook on long-term ratings Stable Positive.