Russian credit rating edges upwards as Moscow keeps budget deficit in check

Russian credit rating: With its economy moving up through the gears and the government in Moscow managing to keep the budget deficit in check, S&P announced that it was upgrading the Russia’s credit rating from stable to positive, leaving its foreign-currency rating one step short of investment grade at BB+.
“External pressures appear to have abated significantly over the last 12-18 months,” S&P said in the statement. “The positive outlook indicates that we may raise our ratings if the Russian economy continues to adapt to the relatively low oil-price environment while maintaining its strong net external asset position and comparatively low net general government debt burden.”
The move puts Russia on the verge of regaining the investment status it lost two years ago when a combination of  the collapse in oil prices and the sanctions imposed in response its annexation of Crimea and its involvement in the war in Ukraine pushed its economy into recession. The rouble gained about 7% on the back of the news, adding 1% against the dollar. 
While strains on the economy are easing, the Finance Ministry still wants to reduce the budget shortfall by a further  percentage point each year between now and the end of the decade in an attempt to balance the books by 2020, with Finance Minister Anton Siluanov predicting that the 2017 deficit could end up at around 2% compared to a previous forecast of 3.2%.
“Consolidation will depend partly on the pace of proposed tax, pension, and labor reforms,” S&P said. “However, since these measures could be unpopular, it is likely that most of them will be launched after the 2018 presidential elections. Even if the government will not, in accordance with our current expectation, fully achieve its ambitious targets, we expect broad control of the fiscal deficit as a result.”