Fitch Ratings has affirmed Armenia's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'B+' with a Stable Outlook.

“Armenia's 'B+' IDRs reflect strong per-capita income, governance and business environment indicators relative to peers, as well as a robust macroeconomic and fiscal policy framework and credible commitment to reform that are underpinned by an IMF programme. Set against these strengths are high public foreign-currency debt, relatively weak external finances, and geopolitical tensions that have the potential to reignite into military conflict.

Prime Minister Nikol Pashinyan's decisive win at the 20 June 2021 snap elections secured a parliamentary majority for his 'Civil Contract' party and should resolve the domestic political crisis that has ensued since the Russian-brokered ceasefire agreement with Azerbaijan concluded the 44-day Nagorno-Karabakh war. The election outcome refreshes the government's mandate to pursue key structural reforms and tackle corruption, and is a further endorsement of democratic-based politics as the second elections to be widely acknowledged as free and fair following the 2018 Velvet Revolution. The new government has emphasised regional peace and commitment to the OSCE Minsk group process to resolve the Nagorno-Karabakh dispute, a marked softening in its tone from last year. Nevertheless, periodic border incidents and minor infractions of the ceasefire agreement are reminders of the possibility for renewed fighting to erupt and the greater reliance on Russia for security in the region”, Fitch’s news release reads.