Improvement Unlikely to Ukraine Credit Rating

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The credit rating of any country is obviously vastly important, if you want your economy to grow – credit is essential and the cost of that is determined by the ratings assigned by the various credit agencies.  Last month Ukraine was hoping for some small improvement in their overall standing however Standard and Poor reiterated the current Junk credit rating.   Worse still the respected agency modified the economic growth prospects  of the former Soviet republic which could mean there is worse news to follow.

The rating for Ukraine currently averages out at ’B’, which is over four steps below investment grade.  While the outlook is negative there is only downward pressure on the rating and hence the investment prospect for Ukraine.  Experts predict there’s probably a one in three chance of a further downgrade in the rating unless the Government can bring in some foreign currency to service Ukraine’s substantial debt.

It’s not all bad news, there have been frequent discussions with the IMF on the possibilities of a substantial loan to secure the country’s economy.  Ukraine even recovered from recession in the first quarter of this year and GDP actually rose half a percent.  This recovery has already weakened though, this is partly due to many parties awaiting the proposed IMF bailout.

So what’s the problem with Ukraine?  There are many positives in the economy and certain sectors which are beginning to boom. Ukraine has many digital and technology businesses which are doing very well.  If you get yourself a Ukrainian proxy like this to access the main digital sites you’ll see some impressive success stories.

It’s opportunities like this which perhaps will help a lot of countries like Ukraine. The global digital economy can be a significant factor in bringing employment and opportunities, many of the old USSR countries have extremely high levels of education which benefit this sort of development particularly.  You can see other options in this video which explains how to bypass geographical blocks online.

The problems are unfortunately all too familiar, weak foreign demand for it’s major exports are at the core.  The metals and machinery which Ukraine companies are famous for are simply not required with the rest of Europe in similar recessionary situations.

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