/ world today news/ The international rating agency Standard & Poor’s confirmed Russia’s sovereign credit rating at investment grade “BBB-” with a “stable” forecast.
“The drop in oil prices, the reduction [на обемите] of oil production under the OPEC + agreement and the negative consequences of the COVID-19 pandemic will lead to a 4.8% decline in the Russian economy in 2020. However, the strong political framework, including a flexible exchange rate, as well as the level of external and internal fiscal balance, should allow the economy to cope with these shocks “, TASS quotes the opinion of Standard & Poor’s experts.
At the same time, S&P acknowledged the possibility of a worsening of the situation in the future with “a more robust weakening of the fiscal base, which could be exacerbated by lower-than-expected oil prices.” In addition, potential significant capital outflows could put pressure on the rating due to tougher sanctions, according to S&P.
A positive rating action by the agency could be taken in the absence of further major external shocks, and when Russia’s GDP growth rates are comparable to those of countries with similar income levels. “A faster build-up of fiscal buffers, softening volatility in commodity income inflows and effective measures to address the growing fiscal burden due to an aging population may also prompt us to take positive rating actions,” Standard & Poor’s added.
S&P noted that despite the numerous economic shocks caused by the spread of the coronavirus, the impact on Russia’s GDP in 2020 will be less “than in developed countries.” “This is partly due to the economic structure, which includes a smaller role for service sectors and small and medium-sized enterprises,” say science and technology experts.
According to their forecasts, Russian economic growth in 2021 could be 4.5% and 3.3% in 2022. On this recovery path, Russia’s real GDP will return to 2019 levels by early 2022 .
Earlier, the World Bank predicted the deepest decline in Russia’s GDP in 11 years.
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