Ratings agency Fitch affirms Ukraine's credit rating at 'CC'
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Ukraine suffered its sharpest economic decline in over 30 years.
(Reuters) - Global ratings agency Fitch on Friday affirmed Ukraine’s credit rating at ‘CC’, saying further foreign-currency commercial debt restructuring is likely due to the economic fallout from the Russia war and large fiscal needs in the medium term.
Ukraine suffered its sharpest economic decline in over 30 years in 2022 because of the war, with preliminary economy ministry data in early January showing a 30.4% drop in gross domestic product last year.
However, the European nation’s economic decline slowed in late 2022 after Russia’s retreat from some southern areas of Ukraine. Its national bank in October forecast a continued gradual recovery in gross domestic product in 2023-24.
Foreign aid is set to remain of critical importance to Ukraine’s financial stability and economy. Government officials have said Ukraine received about $31 billion in foreign grants and loans in 2022.
"We anticipate a high deficit into the medium term, due to reconstruction needs, greater social spending including on war veterans, and an increase on pre-war defence expenditure," Fitch said in a statement.
Fitch typically does not assign outlooks for sovereigns with a rating of ‘CCC+’ or below, the agency said.
