Moody’s Investors Service Limited has upgraded the rating of the City of Moscow from Ba1 to the investment grade of Baa3 with a stable outlook.
The rationale behind the move is the easing of credit pressure and a strong growth of revenue in the past two years. Moody’s writes that tighter cost controls and higher revenues have improved Moscow’s operating performance in the last two years and provide greater financial flexibility for 2019-2021.
“The upgrade of Moscow’s rating is a logical result of the upgrade of Russia’s sovereign rating. It has confirmed Moscow’s status as a leading region in the economy, finance, infrastructure and social development,” Moscow Government Minister and Head of the Finance Department Yelena Zyabbarova noted.
She said the city was conducting a consistent budget policy aimed at creating a favourable investment climate, encouraging businesses and improving the quality of life in Moscow.
Yelena Zyabbarova pointed out that Moscow’s economy was growing consistently and business activity had been high in the past few years. Hundreds of thousands of companies and sole proprietors working in the fields of information technology and communications, trade, finance, industry, construction, as well as the social and other spheres make annual contributions to the Moscow budget.
She added that the city’s debt burden was decreasing. In particular, Moscow’s sovereign debt decreased by 4.3 billion roubles in 2018 and currently amounts to 30 billion roubles.
Fitch Ratings and Standard & Poor’s previously upgraded Moscow’s ratings as well.