S&Ps affirms Russia at BBB/A-3, outlook Stable.

By bne IntelliNews September 2, 2011
Standard & Poors affirmed Russias foreign currency long/short term ratings at BBB/A-3 and national currency long/short term rating at BBB+/A-2, outlook Stable. Agency attributed the affirmation of the rating to governments assets exceeding the liabilities, the government expected to become net-borrower as of 2012, on the background of budget deficit, with net debt forecasted at 4% of GDP in 2012. Agency notes that budgetary policies of the past years were expansionary when it came to intra-budgetary transfers, pensions and salaries, which led to non-oil and gas budget of about 8% of GDP, even higher than that before the crisis. This exposes the finances of the public sector to the risks of oil prices fluctuations, S&Ps believes. Agency also anticipates the resolution of the 2012 presidential race, believing that the result of the elections in which either president Dmitry Medvedev or PM Vladimir Putin are seen to run are going to set the budgetary and economic policies.

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