Fitch Ratings, which raised Russia's outlook to "positive" this month, said Thursday that it could upgrade the country back to its pre-crisis rating in the next two years, but added that oil dependence was a key risk.
Fitch currently rates Russia BBB, which is in investment grade territory, but one notch lower than before the global financial crisis pushed the country into recession in 2008-09.
"If the positive trends, which have influenced the change of the outlook, persist, then there is a good chance of the Russian rating being raised in the next two years," said Ed Parker, head of emerging Europe in Fitch's Sovereigns team.
To earn the upgrade, Russia would need to tighten fiscal policy, reduce dependence on oil and push through major structural reforms, he told a conference in Moscow.
"The biggest risk in Russia would be a significant, long-lasting fall in oil prices," Parker said.
Problem loans in the banking sector stopped growing in the third quarter of 2009, holding at about 25 percent of the portfolio, Fitch analyst Alexander Danilov told the conference.
Fitch predicts gross domestic product will grow 4.3 percent this year, then 4 percent in 2011 and 2012.
A Message from The Moscow Times:
Dear readers,
We are facing unprecedented challenges. Russia's Prosecutor General's Office has designated The Moscow Times as an "undesirable" organization, criminalizing our work and putting our staff at risk of prosecution. This follows our earlier unjust labeling as a "foreign agent."
These actions are direct attempts to silence independent journalism in Russia. The authorities claim our work "discredits the decisions of the Russian leadership." We see things differently: we strive to provide accurate, unbiased reporting on Russia.
We, the journalists of The Moscow Times, refuse to be silenced. But to continue our work, we need your help.
Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and every contribution makes a significant impact.
By supporting The Moscow Times, you're defending open, independent journalism in the face of repression. Thank you for standing with us.
Remind me later.
