S&P affirms Ukraine rating at 'B' with stable outlook

S&P Global Ratings has affirmed its 'B' long- and short-term foreign and local currency sovereign credit ratings on Ukraine. The outlook is stable.

The stable rating reflects the risk of the negative impact of unfavorable economic conditions on Ukraine's economy, the possibility of reversal in reform, as well as the increased international reserves, according to the agency's press service.

Negative factors

The country's rating is constrained by such factors as low per capita income and a difficult institutional and political environment.

Positive factors

Read alsoGov't endorses 2021 budget draft submitted by finance ministryUkraine's credit rating is positively influenced by the improvement in macroeconomic policy since 2015, as well as growing foreign exchange reserves.

The downgrade may occur if the Ukrainian government gives up on key reforms, for example, in terms of ensuring the independence of the National Bank (NBU), whereas the upgrade may happen due to accelerating economic recovery.

Previous outlook

In May 2020, S&P Global Ratings predicted a 5.5% decline in Ukraine's economy in 2020 with its subsequent recovery by 5% in 2021 and a further rise by 3% in 2022.