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    Russia's S&P Credit Rating Reflects Efficiency of Economy - Finance Ministry

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    MOSCOW (Sputnik) - Standard & Poor’s (S&P) said in a statement on Friday that it has affirmed Russia’s foreign currency long- and short-term sovereign credit rating up to 'BBB-/A-3' from ‘BB+’ with a stable outlook.

    "On July 20, 2018, S&P Global Ratings affirmed its 'BBB-/A-3' foreign currency long- and short-term sovereign credit ratings on Russia, as well as its 'BBB/A-2' local currency long- and short-term sovereign credit ratings," S&P said. "The outlook is stable."

    Standards & Poor’s explained that the ratings are supported by Russia's commitment to conservative macroeconomic management, but also its formidable net external asset position, low government debt and considerable monetary flexibility.

    "The ratings are constrained by the structural weaknesses of the Russian economy, which remains dependent on revenues from oil and gas exports, as well as by wider institutional and governance bottlenecks," it said.

    "While Russia's oil and gas sectors only make up around 8 percent of GDP, they still account for some 45 percent of total exports. Further rating constraints include geopolitical tensions and their resulting international sanctions that could drag on Russia's long-term economic growth prospects."

    Moreover, the agency projected Russia's real GDP growth to increase to 1.6 percent in 2018, and 1.8 percent on average over 2019-2021.

    Standard & Poor’s said the stable outlook balances the risks arising from the renewed escalation of geopolitical tensions against the potential for additional enhancement of Russia's public and external finances.

    "We may take a positive rating action on Russia in the next 24 months if its economic recovery gathers momentum and GDP per capita trend growth reaches rates comparable with countries at similar levels of development," it noted. "We could take a negative rating action should geopolitical events result in foreign governments introducing materially tighter sanctions on Russia, for example, on large state-owned energy companies."

    The Russian Finance Ministry views S&P's decision to affirm Russia's sovereign rating as a high assessment of the country's balance of payments, budget planning, and the ability of the Russian government to cope effectively with external shocks, First Deputy Prime Minister and Finance Minister Anton Siluanov said Friday.

    "We positively assess S&P Global Ratings' decision to affirm Russia's sovereign credit rating at " BBB-" with a stable outlook," Siluanov told reporters.

    "The Finance Ministry expects that a positive trend in Russia's economic growth and a responsible budget policy will give this agency strong grounds for raising sovereign credit rating of Russia in the future," Siluanov added.

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    Tags:
    efficiency, credibility, stability, budget, GDP, growth, rating, economy, Russian Finance Ministry, S&P, Anton Siluanov, Russia
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