Fitch Ratings has affirmed Armenia’s long-term foreign-currency issuer default rating (IDR) at ‘B+’ with a stable outlook.

The agency said that Armenia’s ‘B+’ IDRs reflect “fairly high government and external indebtedness, relatively weak external finances and geopolitical tensions that have the potential to escalate into military conflict.”

“These are balanced against high income per capita, governance, development, and ease of doing business indicators that outperform the ‘B’ rated median,” Fitch said in a press release.

Fitch said that Armenia also had a robust macroeconomic and fiscal policy framework, and credible commitment to reform, both of which are underpinned by the IMF stand-by arrangement.

Fitch forecasts Armenia’s real GDP growth to rebound to 3.2 percent in 2021 and 4 percent in 2022, partly due to base effects and supported by expansionary policy stances, especially in public investments. GDP contracted by 7.6 percent in 2020.