Moody's Upgrades Armenia Sovereign Outlook to Positive

Moody's Ratings upgraded Armenia's sovereign outlook from stable to positive while affirming its Ba3 long-term issuer rating in both local and foreign currencies. The agency attributed the revision to declining geopolitical risks, specifically a reduced likelihood of large-scale hostilities with Azerbaijan and efforts to normalize relations with Türkiye.

The upgrade follows the June 2026 parliamentary election victory of Nikol Pashinyan, which Moody's noted will ensure government policy continuity. The agency also pointed to Armenia's diversifying foreign relations with the European Union and the United States as key drivers of stability.

Economic growth is projected between 5% and 5.5% annually for 2026 and 2027. This growth is supported by domestic demand and a $3.5 billion U.S.-Armenia artificial intelligence supercomputing data center project. Despite the positive outlook, the agency maintained the Ba3 rating because of a lack of broad structural improvements, specifically high unemployment and a continued dependence on external financing.