Fitch affirms Armenia at 'BB-'; Outlook Stable

Fitch Ratings has affirmed Armenia's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB-' with a Stable Outlook.

“Armenia’s 'BB-' rating reflects per-capita income and governance indicators that are in line with peers, strong growth prospects, and a robust macroeconomic policy framework,” Fitch said in its report. “Set against these strengths are a wide fiscal deficit relative to peers, relatively weak external finances, high financial sector dollarisation, and geopolitical risks.”

In terms of the country’s continued high growth, Fitch said that economic growth continues to benefit from “spill-overs from strong inward migration from Russia, Belarus, Ukraine and now Nagorno-Karabakh.”

“Real GDP grew 8.7% in 2023 and remained strong at 9.2% yoy in 1Q24. The tourism and information and communication technology sectors are expected to be important drivers of growth, while commencement of the Amulsar gold mine's operations from 2025 will be positive for exports and growth. Fitch expects growth to reach 6% in 2024, 5.5% in 2025 and 5.1% in 2026,” the rating agency said.