YEREVAN, August 2. / ARKA /. Fitch Ratings has affirmed Armenia's Long-term foreign and local currency Issuer Default Ratings (IDRs) at 'BB-'. The Outlooks are Stable.
The issue ratings on Armenia's senior unsecured foreign and local currency bonds have also been affirmed at 'BB-'. The Country Ceiling has been affirmed at 'BB' and the Short-term foreign currency IDR at 'B'
The affirmation of Armenia's sovereign ratings reflects the following key factors: The general government deficit fell to 1.7% of GDP in 2013, against initial projections of 2.8%. This was mainly due to under-execution and delays in the implementation of public investment.
The government expects the deficit to rise to 2.4% of GDP in 2014, although further under-execution is possible.
The increase in public sector wages, effective from 1 July 2014, will increase public spending by about 0.4% of GDP in 2014 and 2015, but has already been budgeted for and will be compensated by an increase in tax collection.
The general government debt level is expected to remain stable at around 43%-44% of GDP in 2014-15, and could fall in 2016 if GDP growth picks up. -0-