Russia, Ukraine, Poland and "possibly" Hungary may be upgraded after Standard and Poor's decision yesterday to raise the Czech Republic's credit rating, ING Groep said Thursday.
The countries may have assessments of creditworthiness lifted in the next six months, Simon Quijano-Evans, chief economist for the Europe, Middle East and Africa region at ING in London, wrote in a note to clients.
S&P raised the Czech Republic's long-term foreign-currency debt two steps to AA- from A, citing the government's low indebtedness and the "prudently managed and balanced economy." The country now has the fourth-highest grade, on par with euro-region Estonia.
This is "yet another example of the emergingmarket versus G7 ratings convergence that will continue at an apparently accelerating pace," Quijano-Evans wrote. "Look for more upgrades in the region in the next six months."
Standard & Poor's downgraded the United States in the country's first-ever ratings cut this month as the company said it was less confident Congress would end Bush-era tax cuts or tackle spending on entitlements. S&P also reduced Japan's creditworthiness to AA- in January, putting it on par with China.
Russia may see its rating rise due to its level of public debt, current account and the budget situation, according to ING. Ukraine's budget performance and "impulses from the International Monetary Fund" may also prompt an upgrade. In Poland, the rating companies will wait for the government's decisions on fiscal policy following the general election on Oct. 9, ING said.
Turkey should have its debt assessment raised, "but ratings agencies are clearly placing a lot of emphasis on the current account," ING said. The country's 12-month current-account deficit widened to a record $72.5 billion in June.
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.
