It is set to be the first time since 2017 that the region has entered a year with no Positive Outlooks and the balance of net Negative Outlooks is the highest since February 2010 – Fitch Ratings said in a recent Fitch Ratings 2021 Outlook for Emerging Europe Sovereigns.
The outlook for sovereign credit ratings in emerging Europe is Negative in 2021, with seven of the 22 sovereigns rated by Fitch with Negative Outlooks and none with Positive Outlooks.
According to Fitch Ratings, the Negative Outlooks for North Macedonia, Romania and Slovakia reflect weakening public finances; heightened external vulnerabilities underpin the Negative Outlooks for Azerbaijan and Georgia and Turkey, while in Belarus, it is the vulnerabilities stemming from the post-election political crisis.
“Fitch has a stable outlook for emerging Europe sovereigns in 2021, as a strong recovery in economic growth will be unable to prevent a further deterioration in public finances. Possible medical solutions to the pandemic and the likelihood that virus-containment measures will be less detrimental to the economy than in 2020 point to a strong rebound in growth in the region. Fiscal policy will remain supportive. Pandemic-related measures will be scaled back, resulting in smaller deficits, but a pronounced tightening of policy is unlikely, meaning government debt/GDP will rise further in most sovereigns in the region. The Next Generation EU Fund will begin to provide support to the recovery in EU countries” – reads the Outlook.
