REUTERS
Standard & Poor's Ratings Services on December 11, 2015, affirmed its 'B-/B' long- and short-term local and foreign sovereign credit ratings on Ukraine, S&P said in a statement.
The outlooks on the long-term foreign and local currency ratings are stable.
At the same time, S&P affirmed the 'uaBBB-' Ukraine national scale rating on the country.
According to S&P, the affirmation reflects the progress Ukraine has made during 2015 in restructuring its debt, while passing major reforms. For example, the government has cut household energy subsidies, solidified the independence of the National Bank of Ukraine (NBU), and revised an overly complex value-added tax (VAT) system. At the same time, the rating agency's 'B-' long-term rating captures the economic and political challenges that Ukraine faces. These include widespread corruption, the unpredictable security situation in the east of the country, as well as parliamentary opposition to the adoption of a tax reform program compatible with the finance ministry's proposed 2016 general government budgetary target of 3.7% of GDP. As of the publication date, with 20 days remaining in 2015, the Rada (Ukraine's parliament) has yet to pass a 2016 budget.
S&P also notes the possibility that the opposition may attempt to bring down the government via a no-confidence vote before year end. Despite this, the rating agency is maintaining its baseline expectation that by early next year, parliament will pass a budget that is roughly compliant with the International Monetary Fund general government deficit target of less than 4% of GDP.