Bloomberg interviewed 17 analysts, of which 12 expressed confidence that the three largest world rating agencies (Fitch, Moody’s and Standard & Poor’s) in the next 12 months will not improve Russia’s credit rating. The Russian sovereign rating on a scale of Moody’s and Standard & Poor’s is non-investment or “junk” level, while Fitch puts rating on the lower tier of investment grade.
Two analysts surveyed by Bloomberg believe that the next year you can expect the increase in the rating of Russia by Moody’s and S&P, and one expert expects rating upgrade from Fitch. One Respondent, in contrast, predicts Fitch ratings in 2017 and will lower the rating of Russia to “junk.”
The last time the credit rating of Russia increased in July 2008 by Moody’s, says Bloomberg. In mid-September, the S&P improved the Outlook on the credit rating of Russia from “negative” to “stable”, which was the first positive decision of the rating agencies in respect of Russia for six years. The Agency maintained the sovereign rating at the same level where the credit ratings of Bulgaria and Indonesia, BB+. The head of the Russian Ministry of Finance Anton Siluanov in this regard, said that the Agency’s decision reflects “the objective process of completing the adaptation of Russian economy to changing external conditions”.
As said Bloomberg analyst at Raiffeisen Bank International Andreas Schwabe, Russia will be able to cope with the difficulties in the implementation of the budget until 2018, when the presidential elections. At the same time, the economist noted that the probability of a downgrade by Moody’s, and Fitch remains, however, the markets will barely react.
Fitch in its rating commentary noted that the fate of Russia’s rating will depend to a greater extent on domestic fiscal policy. Deviation from the stated macroeconomic and fiscal targets, as warned by the Agency, can play for the country a negative role.
In late September, Siluanov said about a possible increase in 2017 limit external borrowing to $7 billion and increased domestic borrowing to more than 1 trillion rubles, the Finance Minister also said that the budget deficit in 2016 will be 3.5–3.7% (instead of previously forecast of 3.3%).
Moody’s and s&P held Russia’s rating to non-investment level since January 2015. In late September, senior Director of sovereign ratings S&P Christian Esters in an interview with Bloomberg said that it may take three years before the rating will be raised.