Rating agency Standard & Poor's downgraded Russia's rating from 'BBB' to 'BBB-' while keeping the outlook at 'negative' due to growing tensions between Russia and Ukraine. "The tense geopolitical situation between Russia and Ukraine could see a significant further outflow of foreign capital and could suddenly undermine the already weak growth prospects," the agency said in a statement.
S&P warns that it could further downgrade the country's rating if new, tougher sanctions are applied to Russia or "due to solvency risks due to much lower than expected economic growth". The rating agency notes that Russia's economic growth fell to 1,3% in 2013, its lowest level since 1999. It warns: “If geopolitical tensions do not improve in 2014 there is a significant risk that the growth falls well below 1%”.
Standard and Poor's instead confirmed France's rating at level AA, with a stable outlook, citing the government's efforts to improve the economy's competitiveness and reduce the public deficit. "The French government has moved towards policies aimed at reducing labor costs and corporate taxation to improve competitiveness," reads a statement from the agency.
