Progress in peace process with Azerbaijan improves Armenia’s rating - Fitch

Progress in the peace process with Azerbaijan can improve Armenia’s rating, Fitch Ratings said.

Fitch Ratings has revised the Outlook on Armenia's Long-Term Foreign-Currency Issuer Default Rating to Positive from Stable and affirmed the IDR at 'BB-'.

“Armenia and Azerbaijan signed a joint declaration that aims to reach a peace agreement, which significantly reduces near-term military escalation risks. Trade with and through Azerbaijan has begun to open up. Relations with Turkiye are substantially improving, and the Turkish government is reportedly considering reopening its land border with Armenia,” the report reads.

The rating agency believes that additional upside to the medium-term growth forecast could emerge from sustained implementation of the peace agreement with Azerbaijan and the reopening of the border with Turkiye.

Among factors that could lead to negative rating action, Fitch names the developments that increase geopolitical risks and undermine political and economic stability, for example, derailment of the current peace process with Azerbaijan.

The rating agency analysts believe that among factors that could lead to positive rating action is a sustainable decline in geopolitical risk and domestic political uncertainty, for example, as a result of meaningful progress in the peace process with Azerbaijan.