Reflecting on the assessment of Armenia’s sovereign rating by the international rating agency Moody’s Ratings at the Cabinet meeting of the Armenian government on Thursday, Prime Minister Nikol Pashinyan stated: “Moody’s has revised the outlook for Armenia’s rating from ‘stable’ to ‘positive’ and reaffirmed the long-term sovereign rating at the Ba3 level.”

Reflecting on the improvement in Armenia’s rating outlook and the maintenance of the sovereign rating at Ba3, the premier presented the positive changes recorded in Moody’s assessment, pointing to the reduction in political and geopolitical risks, the improvement in economic growth prospects, and the strengthening of the structural potential of Armenia’s economy.

The Fact Investigation Platform (FIP) compared the claims made at the government Cabinet meeting with the full Moody’s Ratings decision and noted that the prime minister’s official presentation did not address a number of key risks and reservations identified by Moody’s, FIP reports.

Risks not presented at the government meeting

Uncertainty over signing a peace treaty between Armenia and Azerbaijan

Moody’s does indeed cite the easing of geopolitical and political risks due to the reduced likelihood of a large-scale military conflict with Azerbaijan as one of the reasons for the improved outlook. At the same time, however, it warns that signing a full peace treaty is still unlikely.

“However, a full peace treaty is unlikely in the foreseeable future as Azerbaijan continues to demand that Armenia amend its Constitution, which remains politically sensitive and domestically challenging for Yerevan,” the decision states.

Economic risks arising from Armenia’s relations with Russia

Moody’s addressed also Armenia’s changing foreign policy orientation and the uncertainty surrounding its relations with Russia. According to Moody’s, given the close economic ties between the two countries, this uncertainty could affect Armenia’s economic security.

“While geopolitical risks have eased, uncertainties surrounding Armenia's evolving external orientation and its relationship with Russia continue to pose risks to Armenia's economic security given the two countries' strong economic ties,” the decision states.