Fitch upgrades Ukraine’s credit rating

US-based credit ratings agency Fitch has upgraded Ukraine’s long-term and local currency issuer default ratings to “B” from its current “B-” rating, Interfax Ukraine has reported.

“Ukraine has demonstrated timely access to fiscal and external financing, improving macroeconomic stability and declining public indebtedness, while a shortened electoral period has reduced domestic political uncertainty,” Fitch analysts wrote in a statement, adding that they expect further improvement in creditworthiness due to “the macroeconomic policy continuity, the new government’s strong stated commitment to structural reforms and engagement with international financial instruments.”

According to the agency, Ukraine’s future cooperation with the International Monetary Fund “will facilitate access to official and market financing to meet large sovereign debt repayments in 2020-2021, and serve as an anchor for policies and reforms that could potentially lift growth prospects.”

Analysts at Fitch Ratings predict that the country’s government debt will decline to 47.9 per cent of the GDP by the end of this year and further reduce to 44.4 per cent by 2021. “Prudent fiscal management, stable growth, declining interest rates and moderate exchange rate depreciation pressure will support continued government debt reduction,” they continued, however, adding that the repayment dynamics of the government debt is highly dependent on currency risks.

Commenting on the agency’s announcement, Ukrainian finance minister Oksana Markarova said that “the long-awaited increase in Ukraine’s credit rating was made possible thanks to macroeconomic stabilisation, a decrease in government debt and a reduction in political risks.”