Moody's assigned a negative outlook to the creditworthiness of countries making up the Commonwealth of Independent States, or CIS, in 2020 on the back of increasing external risks and ongoing political uncertainty.
If these risks materialize, they could constrain any further fiscal strength, although enhanced monetary policy, fiscal frameworks and banking supervision could reduce the impact, Moody's said.
Growth in a number of CIS countries is expected to remain solid this year, along with strengthening fiscal metrics, but external risks could challenge the baseline forecast, said Christian Fang, a Moody's assistant vice president and analyst.
While regional debt is projected to remain stable or decline over the next 12-18 months, it will remain above the levels observed during the last regional shock in 2014-2016, Moody's wrote. Effective implementation of multiple reforms in the CIS should gradually increase fiscal and policy buffers and lower reliance on external funds. However, the benefits from these are likely to be limited in the short run.