15 March 2004 11:56
S&P REVISES MOSCOW REGION OUTLOOK TO POSITIVE
MOSCOW. March 12 (Interfax) - Standard & Poor's Ratings Services said today it revised its outlook on the
Moscow region in Russia to positive from stable, owing to the region's improving economic and financial position.
At the same time, Standard & Poor's affirmed its 'B+' foreign-currency issuer credit and
'ruA+' Russia national scale ratings on the region.
The ratings on the region are constrained by its limited financial flexibility, continued debt accumulation, and high
financing needs. Continued economic growth higher than the Russian average, with gross regional product growing by 8.6%
and industrial output by 15.9% in 2003, rising revenues, and an improving debt structure, however, support the ratings.
The Moscow region benefits from its proximity to the City of Moscow (foreign currency BB+/Stable/--). This proximity
results in rapid economic growth in the food industry, trade, and recreation sectors, and should lead to further growth
in budgetary revenue.
"We expect the Moscow region to maintain its higher-than-average economic growth. This will allow it to
withstand the pressure on its budget from growing personnel costs and relatively high infrastructure needs," said
Standard & Poor's Public Finance credit analyst Felix Ejgel. "Further improvement in the region's
debt profile, a reduction of annual debt service levels, stabilization of direct debt at a manageable level of less than
45% of operating revenues, and an improvement in budgetary performance will be essential for a rating upgrade."
[Interfax] |
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