Fitch Ratings has revised its long-term issuer default rating for foreign currency and local currency to positive and confirmed Issuer Default Rating at 'B +'.

The definition of a rating is due to a number of circumstances. The first is that Armenia's economy is now in the recovery phase after a strong external shock of 2014-2015, conditioned by improved structural performance of export, increase in external demand, structural improvement of money transfers recovery; and reliable monetary policy. Fitch has revised its growth forecast for up to 4.3 percent in 2017, as GDP grew by 5.3 percent in 1-3 trimesters. By 2018-2019, the average growth rate is expected to be 3.6% due to the favorable environment for money transfers and export growth.

The next is a strong fiscal consolidation. Armenia has tightened control over budget expenditures. Due to this, according to agency expectations, the budget deficit will be reduced in 2018 from 5.9% in 2016 and will be reduced to 3% and 2.7% by 2019.

Fitch forecasts on budget deficit and growth indicators are in line with the stabilization of public debt. It is anticipated that the debt will rise to 57.5 percent of GDP in 2017, slightly lower than expected 58.6 5 percent, reaching 58.1 percent in 2018 and will gradually decline..

The structure of the Armenian public debt has a high level of privileged debt (66% of the total debt), though 81% of the foreign currency, which is reflected in the exchange rate volatility.

Armenia has an average current account deficit, which Fitch predicts will make 3% of GDP in 2017 and 3.4% in 2018-2019.

Domestic demand-driven import growth will be balanced by export receipts that will be strengthened through sustainable commodity prices, diversification of new markets and stabilization of the Russian economy by boosting export and remittances.

The main factors contributing to the review of the rating are: confidence that the ratio of the public debt / GDP to the downturn is the current growth that contributes to high returns without increasing macroeconomic balances and stable external balance.

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