“Fitch’s assessment left Georgia’s credit rating unchanged against the backdrop of many countries in the post-Soviet space, Eastern Europe and our region which had their ratings downgraded.”

Verdict: FactCheck concludes that Natia Turnava’s statement is HALF TRUE.

22/02/2021

Half True

Natia Turnava: “Fitch’s assessment left Georgia’s credit rating unchanged against the backdrop of many countries in the post-Soviet space, Eastern Europe and our region which had their ratings downgraded.”

Verdict: FactCheck concludes that Natia Turnava’s statement is HALF TRUE.

Resume: According to the Fitch credit agency’s latest updates, Georgia’s outlook was kept at BB negative. Georgia’s credit outlook worsened in April 2020 amid the pandemic from stable to negative. In this part, Natia Turnava’s statement is indeed true. However, of those countries which Fitch assessed, only ratings for Belarus, Armenia and Slovakia were downgraded. In the case of Belarus and Armenia, these changes were stipulated by domestic political instability and the Nagorno-Karabakh conflict, respectively. Therefore, the claim that many countries had their credit ratings downgraded and Georgia’s performance is better in light of current trends is false.

Analysis:

The Minister of Economy and Sustainable Development of Georgia, Natia Turnava, speaking of Fitch’s credit ratings, stated: “Fitch’s assessment left Georgia’s credit rating unchanged against the backdrop of many countries in the post-Soviet space, Eastern Europe and our region which had their ratings downgraded.”

A country’s credit rating gives investors information about risk factors associated with investments in certain countries as well as the reliability of these countries. Generally, Fitch employs the following assessment system: AAA is the highest rating in their assessment which is followed by AA+, AA, AA- above average – A+, A, A-, below average – BBB+, BBB, BBB-, non-investment grade speculative – BB+, BB, BB-, speculative B+, B, B-, highly vulnerable CCC, on the verge of bankruptcy CC and default D.

Table 1: Fitch’s Assessment System

Source: FactCheck.ge

According to Fitch’s ranking system, Georgia’s credit rating is BB with a negative outlook, meaning that there are certain speculative risks in the economy. Of note is that a BB rating is a non-investment grade. According to the Fitch credit agency’s latest updates, Georgia’s outlook was kept at BB negative. In this part, Natia Turnava’s statement is indeed true. However, Georgia’s credit rating outlook worsened in April 2020 from stable to negative amid the pandemic.

The second part of the statement refers to the downgraded credit ratings in Eastern European and post-Soviet countries. Only three countries – Belarus, Armenia and Slovakia – had their credit ratings downgraded as compared to the previous assessment. However, Armenia’s downgrade was caused by hostilities in the region whilst the drop in the ratings for Belarus was stipulated by domestic political turmoil and Western sanctions. The ratings of other countries were left unchanged.

Table 2: Fitch’s Assessment for Eastern European and Post-Soviet Countries