Moody's Investors Service ("Moody's") has changed the outlook on Armenia's rating to positive from stable and affirmed the B1 long-term issuer and senior unsecured debt ratings, the company announced.

The positive outlook is underpinned by macroeconomic policies that should reduce Armenia's vulnerability to external shocks. Moreover, ongoing reforms of the fiscal framework may shore up fiscal strength over time.

Armenia's B1 rating balances credit strengths from robust growth potential and improving institutional strength against credit challenges stemming from a small and low income economy that remains exposed to external developments, a moderately high debt burden that relies on external funding, and latent geopolitical tensions with neighbouring Azerbaijan.

Moody's has also raised Armenia's long-term local-currency bond and deposit ceilings to Baa3 from Ba2. Armenia's long-term and short-term foreign currency bond and deposit ceilings remain unchanged at Ba2/"Not Prime" and B2/"Not Prime", respectively.