US-based credit ratings agency Standard & Poors (S&P) has affirmed Ukraine’s long- and short term foreign and local currency sovereign credit ratings at B-/B with a ‘stable’ outlook on the country’s economy, but added that uncertainties concerning the economy remain.
According to the ratings agency, the country faces sizable repayment obligations of external debts against the backdrop of the country’s presidential and parliamentary elections in 2019.
“While the economy is growing and inflation is on a downward path, the financing outlook is uncertain for government foreign currency redemptions beyond 2019, when Ukraine will have to negotiate a fresh agreement with the International Monetary Fund (IMF),” S&P said in a statement.
Having affirmed the economy as stable, the outlook indicates that Ukraine will comply with the terms of the 3.9 billion-US dollar IMF bailout, although delays remain possible.
“We could consider a positive rating action if we see improvements in growth, fiscal and external imbalances beyond our expectations, and if we conclude that the security situation in the non-government-controlled areas in the east of the country has stabilised and further escalation is unlikely,” the ratings agency said, adding that ratings pressure could grow if the country becomes less able to meet external payments in 2019 and 2020.