WASHINGTON (Sputnik) — Standard & Poor's Ratings Services said Friday it had affirmed its 'BB+/B' long- and short-term foreign currency sovereign credit ratings and its 'BBB-/A-3' long- and short-term local currency sovereign credit ratings on Russia.
“The economy [of Russia] is in recession and only a tentative recovery is forecast in the latter half of 2016,” Fitch stated in a press release.
The 'BBB-' rating is one mark above speculative, or "junk" grade bonds.
In the course of the year, two other major rating agencies, Fitch and Moody's, have sequentially downgraded Russia's credit rating to junk or near-junk status.
The rating agency argued that Russia's economy is on course for a 4 percent contraction in 2015, because of falling consumption and investment in the country.
“Under Fitch's revised forecasts, we now expect the economy to stabilize, growing by up to 0.5 percent in 2016, and rising to 1.5 percent in 2017,” Fitch explained.
The agency said lower oil prices, a weaker Russian currency along with tight monetary and fiscal policy have contributed to the growth forecast.
In June, the Bank of Russia projected the country's gross domestic product to fall by 3.2 percent this year, a slight improvement of the Central Bank's earlier 3.5 percent estimate.
In July, Russia’s Economic Development Minister Alexei Ulyukayev said the country’s economy will grow at a rate of 2.3 percent in 2016.
Fitch downgraded Russia's measure of credit risk from 'BBB' down a notch at the start of 2015, doing the same for 30 Russian and Russian-owned financial institutions the following week.
Fitch cited falling oil prices, the depreciation of the ruble, as well as the effects of the recession on Russia’s financial sector as reasons behind issuing a negative outlook for the country.
