🔵 S&P Global Ratings re-affirms Ukraine “B with stable outlook” when it comes to long-term and short-term liabilities in foreign and national currencies, said the international agency.
🔵 “Ukraine’s growth, balance of payments and public finances exceeded our expectations in 2020,” S&P said in a press release. The Ministry of Finance has successfully maneuvered through many challenges related to the pandemic and handled multiple crises connected with the overall global economic slowdown.
🔵 Ukraine’s rating could be bumped up next year if the economy recovers more actively. “Levels of external liquidity and consolidation of public finances should exceed the current forecast,” according to S&P.
🔵 However, the agency acknowledges some risks will continue to exist. “The rating may deteriorate due to interruptions in obtaining funding from international organizations. Disruptions could occur if the government abandons key reforms such as ensuring the independence of the central bank, which is the key regulator for the country’s financial sector.”
🔵 The banking sector stays relatively strong, S&P says. “Subsidiaries of foreign banks and private Ukrainian banks will remain stable amid the pandemic and will resume growth in the retail and corporate segments.” Analysts note that the main challenges of state-owned PrivatBank, Oschadbank, Ukrgasbank and Ukreximbank in 2021-2022 will be “clearing” balance sheets of NPL issued in previous years, the implementation of effective business strategies, and improving the quality of corporate governance to prepare for partial or full privatization.