Date: 18 January 2019, 16:37,
Moody's Investors Service expects CIS economic growth to remain solid, averaging 3.9 percent for the region in 2019, with the potential for more stringent sanctions on Russia to disrupt regional trade and remittances, Trend reports referring to Moody's report.
"Moody's stable forecast for the CIS countries for 2019 reflects, on the one hand, the agency’s expectations that the sustained economic growth rates will remain in the region, and on the other hand, the risks stipulated by the reduction in liquidity on the world market and political risks," the report said.
"A heavy reliance on external financing exposes the region to tightening global liquidity, yet adoption of strengthened policy frameworks helps mitigate risks,” the report said. "Political tensions remain a key source of risk to economic stability and reform momentum in the region. Political risks could threaten economic stability and reform momentum via a range of channels.”
"Despite growth remaining supportive of reforms and fiscal consolidation, we do not expect economic reforms to accelerate as weak institutional frameworks will continue to constrain policy effectiveness, while rigid spending commitments will keep government debt burdens high for some,” the report said.
"Despite many CIS countries are greatly dependent on external financing, measures to improve the macroeconomic environment have allowed them to reduce their vulnerability to external shocks, which will help them cope with the gradual deterioration of credit conditions in global financial markets," the report said.
"The countries with a high level of dollarization of the banking system may face further increase in banking sector risks, especially in those countries where banks have not fully overcome the difficulties associated with the big amount of bad loans accumulated after a sharp fall in commodity prices in 2014-2015," the report said.