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Investment rating of the Murmansk region

The rating agency ‘Expert RA” has given estimation of the investment rating of the Murmansk region at a level 3B1 “Lowered potential – moderate risk”. On the 27th of November 2013 Rating Agency «Fitch» changed long-term ratings for the Murmansk region from “Stable” to “Negative”. Simultaneously, it reaffirmed long-term rating in foreign and national currency «BB», national long-term rating «-(rus)» and short-term rating at a level «B».

KEY RATING FACTORS

Current balance is expected to be negative (-2-3%) due to increase in operational costs and shortage in tax revenues. The main reason that lead to that decrease was a price-cutting and lower demand in main products of the major industrialists in the region. Debts risks are not so serious as in Russia on the whole but it still growing due to budjet shortfall. The level of ratings is also caused by:

  • inflexible expences
  • weak debt operating – risks are exposed by short-term credits and budget credits that should be repaid by the end of 2015.

The Fitch Agency expects Murmansk region to receive stable transfer flows from the federal budget. Income flow from strong industry and reach mineral resources is also considered to be a favorable factor for the economy of the region.