Credit rating industry leader Standard and Poor’s (S&P) has upgraded Ukraine. The 27 September announcement makes S&P the second of the world’s ‘Big Three” credit rating agencies to upgrade Ukraine in recent weeks, following a similar decision by Fitch in early September. S&P has now raised its long-term foreign and local currency sovereign ratings on Ukraine to 'B' from 'B-'.
This is the latest indication of international optimism over the Ukrainian economy’s future prospects and comes despite mounting concerns over the new administration’s ties to oligarch Ihor Kolomoiskiy and question marks over the Zelenskyy team’s continued commitment to cooperation with the IMF.
Announcing news of the improved outlook for Ukraine, S&P noted: “Ukraine's economy continues to recover. The National Bank of Ukraine has augmented its FX reserves and restrained inflation to below 10%; quasi-fiscal deficits at the state-owned utility, Naftogaz, have been eliminated; and general government debt-to-GDP continues to decline. Ukraine's new administration appears committed to preserving these gains. Moreover, we view positively the new government's intention to improve the business environment and lift the moratorium on the sale of agricultural land. In our opinion, these measures could pave the way for higher foreign investment inflows into Ukraine, boding well for the economy's growth and external leverage.”