Moody’s: Russian GDP to Decline by 5.5% This Year

International rating agency Moody’s expects that Russia’s national GDP will decline by 5.5% in 2020 but will grow by 2.2% in 2021, the agency said on Tuesday, according to TASS.

The rating agency lowered the outlook for Russian GDP growth to 0.5% on March 25 on the back of falling oil prices and the coronavirus pandemic.

Moody’s also revised real GDP outlooks for 2020 and 2021 downward for all members of the Group of Twenty. Oil prices are expected to remain low, the rating agency forecasts.

Last week, Moody’s changed to stable from negative the rating Outlook of Credit Europe Bank, Bank national standard Bank, NBD-Bank and RosDorBank.

According to a press release from the agency, the ratings of all four banks are affirmed at current levels.

“The rating action reflects the increasingly challenging operating environment in Russia due to a long period of low oil prices and a coronavirus pandemic, which will lead to additional difficulties for a wide range of borrowers, – stated in the message. – This, in turn, will lead to a weakening of indicators of the solvency of Russian banks, in particular, asset quality and profitability,” Moody’s said. 

Long-term ratings of Credit Europe Bank on deposits in national and foreign currencies maintained at the level “B1” long-term ratings – “Ba3”, the baseline credit assessment (BCA) and adjusted BCA financial organization “b1” long-term counterparty’s risk assessment (CRA) – “Ba3(cr)”. Short-term Deposit ratings and the counterparty remained at the level of “NP” short-term CRA – “NP(cr)”.

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