Ukraine’s ratings upgrade follows strong Q2 economic growth of 4.6% and comes as the new Zelenskyy government wins plaudits for its reformist posturing and initial appointments.
Fitch Ratings has upgraded Ukraine’s Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDR) to “B” from “B-“. In both cases, the outlooks are positive.
Fitch, which is considered one of the “Big Three” global credit ratings agencies alongside Moody’s and Standard & Poor’s, said the improved outlook reflected Ukraine’s positive macroeconomic fundamentals along with a growing sense of optimism surrounding the initial appointments and reformist agenda of the incoming Zelenskyy administration.
“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. Expected macroeconomic policy continuity, together with the new government’s strong stated commitment to structural reforms and engagement with international financial institutions, mean that Fitch expects further improvements in creditworthiness,” the agency explained in a 6 September statement announcing the Ukrainian ratings upgrade.
The agency also improved its 2019 GDP growth forecast for Ukraine to 3.4%, citing a number of factors including strong domestic demand and agriculture-driven export growth.