15 December 2003 05:05
Fitch assigns National rating of `A+(rus)` to Lipetsk region
LONDON. Dec 15 (Interfax) - Fitch Ratings has assigned Lipetsk region (Oblast) a Long-term National rating of
'A+(rus)', its first National rating in Russia, the international rating agency said in a press release on
Monday.
The rating reflects the strong growth of the regional economy since 1999 and the positive effect it has had on the
region's revenue, which primarily consists of tax revenue. Significant budget surpluses reported in the past few
years have allowed the region, by end-2000, to reduce its direct debt to zero so that present debt obligations are
represented by guarantees only.
However, the rating also takes into account Lipetsk region's reliance on tax revenue from one of the
region's largest tax payers, Novolipetsk Steel Smelter, which exports a substantial portion of its produce.
Additionally, in the near term, the region's revenue and expenditure will remain affected by the budgetary and tax
reform that are likely to lead to increased inflexibility in expenditure and higher dependence on income taxes for
revenue, particularly profit tax.
Lipetsk region is situated in the south-western part of European Russia and is populated by 1.2 million inhabitants
(0.8% of Russia's population). Its contribution to the country's GDP is around 1%. [RU ASIA EUROPE EEU EMRG
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