Page 51 - UKRRptOct19

8.4 ​International ratings
Ukraine - Rating agency
as of September 6, 2019
last change
Moodys (USD rating)
Caa1 (S)
21/12/18
Fitch (USD rating)
B (P)
06/09/16
S&P
B (S)
27/09/19
The Finance Ministry aims to upgrade Ukraine’s credit rating from ‘B’ or ‘speculative’ to ‘A-‘ or ‘investment grade’ by 2024​, according to the government’s 5-year program posted on rada.gov.ua. The Ministry promises to introduce an agency for state debt management, make state debt paper more liquid, reduce the foreign currency portion of state debt to 50% (from 66% today) and cut the state debt to GDP ratio to 40% (from 58% today).
Ukraine’s sovereign debt was upgraded by S&P, which raised Ukraine’s long-term foreign currency score to B from B-,​ putting it on par with Egypt and Togo.
S&P said improvements in the economy and government finances mean the country should retain access to domestic and international capital markets, enabling it to meet commercial debt payments through 2020.
“Ukraine’s economy continues to recover,” S&P said in a statement Friday. Foreign-currency reserves have grown, inflation has been held below 10% and the government’s debt is declining relative to gross domestic product, and “Ukraine’s new administration appears committed to preserving these gains,” S&P added.
The upgrade follows a tumultuous week for Ukraine, whose president, Volodymyr Zelenskiy, has been pulled into a scandal over whether that US President Donald Trump sought assistance from a foreign country to help him win next year’s election.
The country has also struggled to resolve potential threats to the independence of its central bank, a political struggle over the nationalization of its biggest lender, a delay in reaching a new aid agreement with the International Monetary Fund and the resignation of a popular reformist.
But the economy is recovering and stable. S&P said it projects GDP growth of 3.2% this year, revised from a previous forecast of 2.5%, with average annual growth of 3% for the 2020-2022 period. It cited the “strong performance” in the second quarter, mostly on domestic demand.
Fitch Ratings upgraded Ukraine's Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDR) to 'B' from 'B-', ​while the outlooks are positive.
Among the key rating drivers of the update is the fact that Ukraine has demonstrated timely access to fiscal and external financing, improving macroeconomic stability and declining public indebtedness, while a shortened electoral period has reduced domestic political uncertainty.
"Expected macroeconomic policy continuity, the new government's strong stated commitment to structural reforms and engagement with IFIs mean that
51​ UKRAINE Country Report​ October 2019 ​ ​www.intellinews.com