Fitch raises Russia outlook to 'positive' on recovery

8th September 2010, Comments 0 comments

International ratings agency Fitch on Wednesday raised its credit outlook on Russia to "positive" from "stable," saying the country was recovering from the global financial crisis.

"The Russian economy is recovering after being hit hard by the global financial crisis," Edward Parker, the head of Fitch's emerging Europe section, said in a statement.

He said a more flexible exchange rate policy, stabilisation of the banking sector and rising foreign exchange reserves were among factors that were expected to boost the country's financial and economic prospects.

"Recovery appears to be fairly balanced, and is supported by the rebound in oil prices, rising real incomes and stabilisation of financial confidence and capital flows," the agency said.

"A sizeable current account surplus, which Fitch forecasts at 4.6 percent of GDP in 2010, is helping Russia to rebuild its foreign exchange reserves."

Fitch maintained the country's credit rating at BBB.

Last year, Russia's hydrocarbon-dependent economy suffered a 7.9-percent economic contraction after growth of 5.6 percent in 2008.

The country suffered from a record drought this summer that officials said would cut at least 0.7-0.8 percentage points from 2010 growth.

Fitch said the country's economy however remained weighed down by poor governance, corruption, a weak business climate and heavy exposure to commodity prices.

© 2010 AFP

0 Comments To This Article