The international rating agency Standard & Poor's Global Ratings has confirmed Tajikistan's sovereign credit rating at B/B with a "stable outlook," according to the country's National Bank.
"The formation of a stable outlook was influenced by factors such as improved dialogue with international partners, sustained economic growth and an increase in international reserves, which allow the country to meet its external debt servicing obligations on time and reduce potential pressure on the balance of payments," the report says.
It also notes "the strengthening of foreign economic indicators in recent years and the expectation of maintaining a significant share of concessional loans in the structure of public debt."
The regulator considers the confirmation of this rating to be recognition of the positive results of economic development and sustainable macroeconomic management in the country, which contributes to strengthening Tajikistan's international image and attracting foreign investment.
The report emphasizes that the NBT has been cooperating with international rating agencies in determining the country's sovereign credit rating since 2014.
Standard & Poor's, headquartered in New York, is one of the five reputable rating agencies in the world. Based on the concluded bilateral agreement, the organization is engaged in assigning Tajikistan a sovereign credit rating. The Agency evaluates the economic situation and the degree of economic security of the country. The agency's analytical report on the assigned rating is used to attract foreign investment and gives the republic access to international financial markets.
What is a sovereign credit rating?
This is an "assessment of the reliability" of the country as a borrower. International agencies (Standard & Poor's, Moody's, Fitch and others) evaluate:
– how stable is the economy;
– what is the debt burden;
– how does the government manage finances;
– are there any risks of a crisis?
What does the B/B level mean?
This is an average rating on the S&P sovereign credit rating scale, which means that a country can pay its debts, but there are significant risks, especially if a crisis occurs or the economy weakens.
This level is often referred to as "speculative" or "non-investment".
What is a "stable outlook"?
This means that the situation in the country is unlikely to worsen or improve significantly in the next 12-18 months. In other words, the rating will remain approximately the same.
To simplify further, a B/B with a "stable outlook" is a signal: "the country is able to service its debts, but there are vulnerabilities. No sharp deterioration is expected so far, but the situation is still risky."
