International Credit Rating Agency Fitch Maintains Ukraine's Sovereign Credit Rating at 'CC'

[Image source=Yonhap News]

[Asia Economy Reporter Song Seung-yoon] International credit rating agency Fitch maintained Ukraine's credit rating at 'CC' on the 20th (local time), according to major foreign media reports.

Fitch stated that due to economic contraction caused by the war with Russia and large-scale fiscal demands, further restructuring of foreign currency bonds is possible for Ukraine.

Fitch explained, "Due to the need for reconstruction, increased social costs for soldiers participating in the war, and pre-war increases in defense spending, a large-scale deficit is expected in the medium term."

Fitch upgraded Ukraine's credit rating by two notches from 'Restricted Default (RD)' to 'CC' in August last year. The 'CC' rating is three notches above the sovereign default rating of 'D'.

Ukraine's gross domestic product (GDP) decreased by 30.4% last year, marking the lowest economic growth rate in 30 years. However, the decline slowed toward the end of last year. In October last year, there was also a forecast of gradual recovery potential for 2023?2024.

Ukraine's fiscal stability and economy are expected to rely heavily on overseas support for the time being. The scale of support, including loans received from abroad last year, was approximately $31 billion (about 38.3 trillion KRW).

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