Armenia will be able to borrow from international organizations at lower interest rates
The credit rating service Moody’s raised Armenia’s “sovereign rating” from B1 to Ba1.
Experts at the organization gave a positive assessment of the diversification of the Armenian economy and predict high GDP growth rates.
What factors influenced the decision?
Moody’s experts say that macroeconomic indicators, in particular, high GDP growth rate and an overall stable macroeconomic situation, influenced the decision to improve Armenia’s rating. Moreover, they believe that the country’s stability will continue into the future.
Moody’s considers it a good thing that Armenia’s economy is diversified and that the country doesn’t have a high dependence on any one industry:
“The growing diversity of Armenia’s economic growth factors, combined with increasing experience in stabilizing macroeconomic policies, is making the Armenian economy more sustainable. Continued measures to strengthen the country’s public finance will likely also gradually restore some of the fiscal [Government Policy to Improve Economic Stability – JAMnews] power lost between 2014-2017.”
What this means for Armenia
The Prime Minister himself brought the information to the attention of the Armenian media. Nikol Pashinyan believes that the improved rating gives the government new opportunities:
“This is a crucial development that builds international confidence in the Armenian economy and makes our country much more appealing to investors.”
The Prime minister also wrote on his Facebook page:
“We must also acknowledge the importance of developing Armenia’s IT industry, which mainly conducts research and development in high-tech fields and is a solid foundation for an economy based on scientific knowledge.”
Deputy of the National Assembly from the ruling faction My Step Alliance Artak Manukyan explained to JAMnews:
“The Moody’s rating will primarily affect our lending interest rates. This means the loans we take out and the securities we issue. Being more predictable and trustworthy partners, we will be able to get better deals in our financial transactions. And this, in turn, will create a more favorable investment climate.”
Former Chairman of the Central Bank of Armenia Bagrat Asatryan agreed with this assessment:
«When a country’s rating increases, so does the credibility of the country on the whole. And this will have a direct effect on the percentage at which our securities are bought back. They will become a less risky asset.”
Bagrat Asatryan suggests another positive outcome: the improved rating may lead to decreased interest rates within the country.