Moody’s changes outlook on Russia

Moody’s changes outlook on Russia

Moody’s Investors Service has changed the outlook on Russia’s Ba1 government bond rating to stable from negative, affirming the rating and citing economic recovery, Sputnik reports. 

Moody's said that the Russian government's set of measures made the country less dependent on oil and gas revenues, allowing it to switch to gradual replenishment of its savings buffers.

"The main driver for changing the outlook on Russia's Ba1 government bond rating to stable from negative is the government's enactment of a medium-term fiscal consolidation strategy that is expected both to lower the government's dependence on oil and gas revenues and to permit the gradual replenishment of its savings buffers. In addition, the Russian economy is now recovering after a nearly two-year-long recession," Moody’s said.

Russia has been hit by a downturn that began in early 2015 after falling oil prices and Western anti-Russia sanctions took bite. The country's GDP fell 3.7 percent in 2015, according to the Russian Federal Statistics Service Rosstat.

The Russian Economic Development Ministry's 2017 baseline scenario forecast is a GDP increase of 0.6 percent. Growth is expected to further recover in the subsequent years, growing 1.7 percent in 2018 and 2.1 percent in 2019.