Standard and Poor’s upgrades Russia rating to stable

Standard & Poor's upgrades Russia's outlook. Analysts believe that GDP should increase by 1.6% for the next three years, despite the sanctions imposed by Europe to Moscow to the Ukrainian question. "The exogenous risks for Russia – the note reads – have been reduced significantly in a context in which the economy of the country comes to terms with the double shock linked to lower oil prices and sanctions imposed by the European Union and the United States ".

The rating agency has revised upwards from "negative" to "stable" outlook on the credit rating assigned to the Russian Federation. Confirmed the long and short-term credit standing, unchanged at "BB + / B". At the same time, the long- and short-term foreign currency ratings were affirmed at below the investment grade level at 'BB + / B', and the long- and short-term local currency credit ratings at 'BBB- / A-3 '. The agency affirmed the long-term national scale rating on Russia at 'ruAAA'.

“The outlook revision reflects our view that external risks have abated to a significant extent,” the rating agency said and added that “We expect the Russian economy and policy making will continue to adjust to the lower oil price environment and that the country will maintain its strong net external asset position and moderate net general government debt burden in 2016-2019".

S&P’s inflation forecast is above that of the central bank: 7% in 2016 (versus 5%-6%) and 5% in 2017-2019 (versus the 4% target).

“We could lower the ratings if geopolitical events were to result in foreign governments significantly tightening their sanctions on Russia, or if GDP growth or fiscal or external balances were materially weaker than our current projections,” the agency warns.