Moody’s downgrades Ukraine to “Caa3” on debt uncertainty
(Reuters) – Moody’s on Friday downgraded Ukraine’s international forex sovereign credit standing to “Caa3” from “Caa2”, with a adverse outlook, citing elevated dangers to the federal government’s “debt sustainability” following Russia’s invasion.
“Whereas Ukraine is benefiting from massive commitments of worldwide monetary help, serving to to mitigate speedy liquidity dangers, the ensuing important rise in authorities debt is more likely to show unsustainable over the medium time period,” the scores company mentioned.
The company, which earlier stored the nation’s outlook below overview, revised it as a consequence of uncertainty across the evolution of the struggle and credit score implications related to it.
The Group of Seven’s monetary leaders agreed on $9.5 billion in new support to Ukraine on Friday and promised sufficient cash to maintain the nation’s devastated financial system afloat so long as it fights towards Russia’s invasion.
Moody’s mentioned it expects the army battle in Ukraine to be extra extended than initially assumed and forecasts the nation’s actual gross home product (GDP) to shrink by about 35% in 2022.
The company expects the Ukrainian financial system to begin a restoration from 2023, however expects Russia’s invasion to trigger a everlasting injury to the nation’s GDP.
(Reporting by Shivansh Tiwary in Bengaluru; Modifying by Maju Samuel)
