S&P improved its Outlook on the credit rating of Russia


International rating Agency Standard & Poor’s changed the Outlook on the sovereign credit rating of Russia from “stable” to “positive”. This is stated in the message Agency. The country’s rating remained at BB+, which in the rating system of S&P is considered non-investment (or “junk”).

The positive Outlook means that S&P may raise the credit rating of Russia in case the Russian economy will continue the process of adaptation to relatively low oil prices, and the size of net public debt will remain small, as noted in the release.

The Agency expects growth of Russia’s GDP in 2017-2020 will amount to an average of 1.7%. Among the factors that can impede the recovery of high growth rates GDP, S&P calls for foreign sanctions against Russia, the structural problems of the Russian economy, and low oil prices.

S&P believes that the banking sector will remain vulnerable, however, the Agency experts see “early signals of stabilization” in this field.

In September 2016 S&P has improved rating Outlook of Russia from “negative” to “stable”. Then it was the first since 2010, a positive rating of Russia’s sovereign rating by international rating agencies. As noted by the Minister of Finance Anton Siluanov, the Agency’s decision reflects “the objective process of completing the adaptation of Russian economy to changing external conditions”. Thereafter, similar steps to improve the Outlook on the rating of Russia has launched two other international rating agencies — Fitch and Moody’s (both Agency improved the Outlook from “negative” to “stable”). In this case, and S&P and Moody’s assess the credit rating of Russia to non-investment level. Only the Fitch Agency puts Russian sovereign rating at BBB- (one notch above “junk”).

In September 2016, the senior Director of sovereign ratings S&P Christian Esters in an interview with Bloomberg stated that the increase of Russia’s credit rating may not occur for three years (in the absence of unexpected factors, such as the sharp rise in oil prices).

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