KYIV
Fitch Ratings has revised the outlook on seven major cities in Ukraine long-term Foreign and local-currency Issuer Default Ratings (IDRs) to Positive from Stable and affirmed the IDRs.
“The revision of the outlooks follows the revision of Ukraine’s sovereign outlook to Positive on 6 August 2021, as the ratings of Dnipro, Kyiv, Kharkiv, Lviv, Mariupol, Mykolaiv and Odessa are capped by the sovereign ratings,” Fitch said in a report.
The agency said that the derivation of the Standalone Credit Profiles (SCP) and accordingly the derivation of the long- and short-term foreign-currency IDRs were unaffected by the rating action, and the IDRs have been affirmed. Dnipro’s SCP remains ‘b+’, Kyiv’s ‘b+’, Kharkiv’s ‘b+’, Lviv’s ‘b+’, Mariupol’s ‘b+’, Mykolaiv’s ‘b+’, and Odessa’s ‘b+’.
Earlier this month, Fitch revised the outlook on Ukraine’s long-term foreign-currency IDR to Positive from Stable and affirmed the IDR at ‘B’.
Fitch said that the rating was supported by Ukraine’s credible macroeconomic policy framework, a record of multilateral support, favourable human development indicators, net external creditor position of 11 percent of Gross Domestic Product (GDP), and lower public debt than the ‘B’ median.
Fitch forecasts Ukraine’s GDP growth of 4.1 percent this year, helped by a pick-up in agriculture and 12.9 percent real wage growth year-on-year in June, with short lockdowns in January and April subtracting an estimated 0.6 percentage points from annual growth.
The vaccination rollout has quickened over the last month but is low, at 13 doses per hundred people, and represents a downside risk to the forecast.
“We project GDP growth of 3.9 percent in 2022, slowing to 3.5 percent in 2023, which is close to our assessment of Ukraine’s trend rate,” Fitch said.
The next scheduled review for the seven cities in Ukraine is scheduled for 19 November 2021.