Page 40 - GEORptNov18

8.4 International ratings
Georgia - Rating agency
as of August 2018
Bond rating: Moody’s
Ba2 (Stable)
Bond rating: Fitch
BB- (Positive)
Bond rating: S&P
BB- (Stable)
Fitch affirms Georgia at ‘BB-’, but warns of risks related to Russia and Turkey
Fitch Ratings affirmed Georgia's Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDR) at ‘BB-' with a positive outlook on August 24, the rating agency said in a s tatement . Fitch said the positive outlook reflects Georgia’s favourable growth prospects and the steady improvement in the country’s public finances.
However, the rating agency warned of downside risks related to escalating negative developments in Turkey and risk of further US sanctions against Russia, even though so far Georgia's economy has been “resilient against recent regional volatility”.
This was reflected in the country’s strong economic growth in the first half of 2018 with statistics office GeoStat’s estimate of 6.0% GDP growth exceeding Fitch's expectations.
Still, Fitch pointed out that Russia and Turkey are Georgia's second and third largest trading partners, accounting for 14.5% and 7.9% respectively of total exports in 2017, as well as being “important sources of remittances, foreign direct investment (FDI), and tourism revenues”.
Georgia has a “track record of macroeconomic resilience against regional shocks” Fitch pointed out in the statement, noting the country’s governance and business environment indicators that are above the current medians of its 'BB' category peers.
On the other hand, according to Fitch, Georgia’s external finances remain significantly weaker than the majority of its ‘BB’ rated peers. It points to the country’s large current account deficits and low external liquidity that leave the open economy vulnerable to external shocks.
40 GEORGIA Country Report November 2018 www.intellinews.com