Moody's downgrades Ukraine to "Caa3" on
debt uncertainty
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[May 21, 2022]
(Reuters) - Moody's on Friday
downgraded Ukraine's foreign currency sovereign credit rating to "Caa3"
from "Caa2", with a negative outlook, citing increased risks to the
government's "debt sustainability" following Russia's invasion. |
![](../images/052122pics/busine45.jpg)
A view shows a car parked outside a building damaged during
Ukraine-Russia conflict in the southern port city of Mariupol, Ukraine
May 20, 2022. REUTERS/Alexander Ermochenko |
"While Ukraine is benefiting from large commitments of
international financial support, helping to mitigate immediate
liquidity risks, the resulting significant rise in government
debt is likely to prove unsustainable over the medium term," the
ratings agency said.
The agency, which earlier kept the country's outlook under
review, revised it due to uncertainty around the evolution of
the war and credit implications associated with it.
The Group of Seven's financial leaders agreed on $9.5 billion in
new aid to Ukraine on Friday and promised enough money to keep
the country's devastated economy afloat as long as it fights
against Russia's invasion.
Moody's said it expects the military conflict in Ukraine to be
more prolonged than initially assumed and forecasts the
country's real gross domestic product (GDP) to shrink by about
35% in 2022.
The agency expects the Ukrainian economy to start a recovery
from 2023, but expects Russia's invasion to cause a permanent
damage to the country's GDP.
(Reporting by Shivansh Tiwary in Bengaluru; Editing by Maju
Samuel)
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