Fitch revises Ukraine's sovereign outlook to positive, affirms rating at 'B'

Fitch revised the outlook on Ukraine’s long-term foreign and local currency issuer default rating to Positive from Stable yesterday and affirmed Ukraine’s country rating at ‘B’. The agency noted the narrowing budget deficit from 7.9% to GDP in 2010 to 4% of GDP in 2011, fiscal consolidation, an economic recovery and the approval unpopular pension reform among the factors driving the revision. On top on that, Fitch said the stabilization of  banking system asset quality and ‘easing concerns’ on Ukraine’s ability to finance itself in the short-term (given successful government and private external and domestic debt placements in 2011) also contributed to the action. Fitch forecasts the economy to rise by 4-4.5% in 2011-2012 and total government debt remaining at 30% of GDP in 2011E.