S&P Global Ratings affirmed sovereign credit ratings on Ukraine that prove progress of the pursued by the Government reforms

Standard&Poor Global Ratings, following the ratings announced by international agencies Moody's and Fitch, affirmed Ukraine's sovereign credit rating at ‘B- / B’ with stable outlook. This is viewed as recognition of the progress of the course of reforms pursued by the Government.

The press release published by S&P Global Ratings recognizes reforms are underway in Ukraine, including within the framework of the implementation of the program of the International Monetary Fund.

“The stable outlook reflects our expectation that the Ukrainian government will maintain access to its official creditor support over the next 12 months by pursuing the required fiscal, financial, and economic reforms,” the release reads. “We could consider a positive rating action if economic growth significantly outperforms our expectations, alongside improvements in fiscal and external imbalances, and there is no further deterioration in the situation in the east of the country.”

Specialists from S&P Global Ratings noted that since the beginning of the year, Ukraine had faced major challenges, with a key challenge in the first quarter of 2017 which was a trade blockade in Donbas leading to loss of assets and sources of energy. “However, data so far suggests that the economy has been able to weather the shock and will likely grow by about 2.2% this year,” the report contains, “We expect the negative shock of the Donbas trade blockade to fade out and real GDP growth to accelerate, averaging 3% over 2018-2020. Pent-up investment demand and healthy demand for Ukrainian exports, especially metals and agricultural products, will continue boosting growth, in our view.”

The Company considers among those actions of topmost importance the implementation of four crucial reforms which will benefit the country's future growth, such as: further implementation of a pension reform, approval of new legislative framework to ensure a large-scale privatization process according to new rules, deepening and efficient application of anti-corruption initiatives, as well as a well-coordinated tariff policy. Peculiar attention should be paid to the land reform. “This reform, coupled with functioning anti-corruption courts and a well-thought-out privatization process, could unlock potential for further foreign direct investment (FDI) inflows,” the report reads.