Today, September 27, 2019, S&P Global Ratings raised its global scale long-term foreign and local currency sovereign ratings on Ukraine to 'B' from 'B-' and its Ukraine national scale ratings to 'uaA' from 'uaBBB'. The Agency also confirmed the short-term sovereign ratings at 'B'. The outlook is stable.
The stable outlook reflects the agency's expectation that Ukraine's new government will preserve the macroeconomic reforms of recent years while the economy recovers and general government debt relative to GDP declines. As a result, Ukraine should retain access to domestic and international capital markets, allowing it to meet commercial debt repayments through 2020.
S&P analysts consider as positive the intentions of the new government to improve business climate and remove a moratorium on sales of agricultural land. The Rating agency also considers these measures could lead to an increase in volumes of foreign investment to Ukraine facilitating economic growth and reducing vulnerability to external challenges.
S&P could consider a positive rating action if there are improvements in growth, fiscal, and external metrics beyond our expectations. Rating agency could also consider raising the ratings if inflation converges toward the NBU's target, or if credit growth in real terms picks up and capital controls are lifted.