International rating agency Moody's Ratings has changed the outlook on Armenia's long-term sovereign rating from 'stable' to 'positive'. At the same time, the country's rating itself was affirmed at Ba3 for local and foreign currency obligations.

Moody's believes that the improved outlook is due to reduced political risks, including a decreased likelihood of a new large-scale military conflict with Azerbaijan, the expansion of Armenia's foreign economic ties, and relatively low domestic political risks.

The agency's analysts also noted that strengthening economic growth prospects could lead to further improvement in the country's fundamental indicators. Among Armenia's strengths, Moody's highlights high growth potential, the resilience of state institutions, and the quality of governance.

At the same time, the agency pointed to persistent risks, including rising debt servicing costs, geopolitical uncertainty, and challenges associated with changes in the country's foreign policy course. In particular, relations with Russia remain a risk factor for economic security due to the continued close interdependence of the two countries.

Armenia's country ceilings for ratings remained unchanged: Baa2 for local currency obligations and Ba1 for foreign currency obligations. Moody's explained that the difference between these indicators and the sovereign rating reflects a combination of strong institutions, a limited role of the state in the economy, and persistent external risks.