Moody’s: Armenia’s parliamentary elections to ensure political stability and policy continuity

YEREVAN, May 14./ARKA/. The election victory of Armenia’s ruling coalition is credit positive as it “will ensure a degree of political stability and policy continuity,” according to analysts at Moody’s Investors Service.

Armenia is rated Ba2 with a negative outlook at Moody’s, the second best junk rating.

Moody’s analysts also said referring to international observers’ opinion that unlike the 2008 presidential election that was followed by fierce clashes, the recent parliamentary elections were peaceful. 

At the same time, some election irregularities were still seen in the parliamentary elections. 

According to Moody’s Investors Service, the Republican Party of Armenia headed by President Serzh Sargsyan won 44% of votes, and Prosperous Armenia, Republicans’ fellow coalition member, scored 30%. The ruling coalition’s third member, Orinats Yerkir, obtained more than 5% necessary for taking up seats in the National Assembly. These parties together will have majority in the parliament. 

The joint result of the Republican Party of Armenia and Prosperous Armenia is 74% now against 49% in 2007. 

In their report, Moody’s analysts say that the government has got good opportunities for implementing economic and financial reforms, including tax reforms, and for taking measures aimed at improving business environment and promoting development of small and medium businesses. 

In November 2011, Moody’s downgraded Armenia’s rating Ва2 from stable to negative. 

Earlier, the rating agency said that it may revise outlook Armenia’s long-term rating upward, to stable, if risks of its foreign economy’s dependence on its key trade partner’s economic growth lessen. 

In March, the International Monetary Fund praised the Armenian government’s efforts for narrowing its budget deficit from 5.7% of GDP in 2009 to 3% in 2011 and for implementation of economic policy designed to improve the country’s competitiveness. 

A large number of red tape hurdles for doing business have been eliminated as evidenced by the World Bank’s Doing Business 2012 Report, in which Armenia has improved its standing by moving from the 61st position in 2011 to the 55th position among 183 surveyed countries (the 61st rank in 2011).-0---