MOSCOW, March 28 (RIA Novosti) – International rating agency Moody’s Investors Service has affirmed Russia’s Baa1 government bond rating and stable outlook due to the country’s low government debt, a mostly balanced budget, very low debt-service costs and the increase in exchange-rate flexibility.
According to Moody’s, Russia’s general government debt stood at around 13 percent of GDP in 2012, while debt-service costs were at around 1.5 percent of general government revenues in the same period.
“Moody’s also views positively the recently improved access of non-residents to the Russian sovereign bond market, which should help raise the traditionally scarce long-term funding, and over time also increase the attractiveness of corporate borrowers,” the agency said on its website on Wednesday.
Among negative factors applying downward pressure on Russia’s rating, Moody’s noted the country’s lower post-crisis growth potential as well as stagnating oil production and “the economic volatility that stems from Russia’s dependence on commodity output and exports.”
According to the official forecast by Russia’s Economic Development Ministry, the country’s GDP growth is expected at 3.6 percent this year and 4.3 percent in 2014. Meanwhile, the Russian government is planning to keep inflation at 5-6 percent.
Russia’s GDP grew only by 3.4 percent last year, the lowest since the deep recession of 2009, with weak demand for Russian exports in Europe and faltering investment.
Former Finance Minister Alexei Kudrin said earlier in March that Russia must improve investment climate and diversify its economy in order to stimulate further GDP growth.