Moody’s Upgrades Russia’s Sovereign Rating to Stable
Improvements in Russia’s economic outlook continue as Moody’s, the international ratings agency, has changed its outlook on Russia’s sovereign rating to stable.
According to a statement by Moody’s Investors Service, the company changed “the outlook on Russia’s Ba1 government bond rating to stable from negative”. Moody’s also confirmed Russia’s government bond rating and issuer rating at Ba1.
The agency said, “The main driver for changing the outlook on Russia’s Ba1 government bond rating to stable from negative is the government’s enactment of a medium-term fiscal consolidation strategy that is expected both to lower the government’s dependence on oil and gas revenues and to permit the gradual replenishment of its savings buffers. In addition, the Russian economy is now recovering after a nearly two-year-long recession”.
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Russia’s economy is set to expand at 1.5 percent during 2017, a similar rate to the EU. However, the Russian economy is developing, while the EU is declining.
Russia has made considerable efforts to realign its economy with that of Asian growth and investment, following the imposition of sanctions from the US and EU in 2014. As a result, Russia has been entering into a period of internal tax and development reform.
Further, Russia has committed to developing better bilateral trade ties directly with several Asian nations and territories such as Hong Kong, India and Singapore. “The Russia-Asia trade corridor has opened and is rapidly growing”, says Chris Devonshire-Ellis of Dezan Shira & Associates.
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Devonshire-Ellis added, “This fits in very well with China’s Silk Road development ambitions, and will be the source of much bilateral and multilateral trade between Russia and Asia. This development is a direct result of the sanctions imposed upon the country. Russia has made a shrewd move in aligning itself with Asia, and this dynamic will become more powerful in coming years”.