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Moody’s Investors Service has affirmed the Government of Armenia’s Ba3 local and foreign currency long-term issuer ratings, as well as the foreign currency senior unsecured ratings. Concurrently, Moody’s has changed the outlook to stable from negative.

The decision to change the outlook to stable reflects Moody’s assessment that risks to Armenia’s credit profile are balanced, compared to Moody’s last review in March 2022 where risks were assessed to be skewed to the downside. Armenia’s economic and fiscal metrics have improved markedly over the past year amid a surge in income, capital and labor from Russia, part of which Moody’s expects to be sustained.

Moody's projects also real GDP growth to moderate to around 7% in 2023 and 5-6% in 2024, on the expectation that financial and labor flows will ease from the heady pace recorded in 2022.

The agency expects the government debt burden to stabilize at around 45% of GDP over the next two to three years, lower than the average of 51.7% recorded over 2017-2019.