Moody’s: Stabilised oil prices, GDP growth underpin CIS companies’ stable outlook for 2018; geopolitical risks remain
London, 12 December 2017 — Firmer oil prices will continue to support GDP growth among Commonwealth of Independent States’ (CIS) members, underpinning the stable outlook on the region’s non-financial corporates, says Moody’s Investors Service in a report published today.
“GDP growth, recovery in oil and other commodity prices, and better domestic demand are driving our stable 2018 outlook for CIS non-financial corporates. However, geopolitical risks still persist particularly for Russia,” says Artem Frolov, Vice President — Senior Credit Officer at Moody’s.
Russia’s return to GDP growth on the back of the oil price recovery and effective government fiscal policies translates into stronger domestic demand and declining interest rates. However, the risk of additional international sanctions remains, although corporate liquidity is healthy and should provide a buffer. The sovereign rating and country ceiling continue to constrain ratings of the strongest Russian corporates.
In Kazakhstan, the higher oil price and government fiscal stimulus are boosting GDP growth and domestic demand. Operating environment for corporates is stabilising on the back of banking system restructuring.
The Ukrainian economy will continue to gradually recover from a deep recession in 2014-15 and inflation will decline. While lacklustre domestic demand will pick up in 2018, event risks remain high and external liquidity remains weak.
Moody’s report, “Non-financial corporates — CIS: 2018 Outlook,” is available on www.moodys.com. Moody’s subscribers can access this report via the link provided at the end of this press release. The rating agency’s report is an update to the markets and does not constitute a rating action.