YEREVAN — Moody’s Investors Service and Fitch Ratings on Tuesday revised upward their sovereign credit outlook for Armenia to stable from negative, citing the government’s commitment to fiscal consolidation and expectation for a further reduction in its current account deficit.

The Caucasus country’s speculative grade credit rating of Ba2, which is two notches below investment grade, was affirmed, the ratings agencies said in their statements.

“Armenia’s rating is supported by a relatively strong macroeconomic framework and a good inflation track record in comparison with the peer group of ‘BB’ rated sovereigns”, says Fitch Ratings report.

Armenia’s still large current account deficit of 11.1 percent of gross domestic product in 2012 is expected to gradually narrow in size, Moody’s said.

The country is emerging as a key transit route for oil and gas exports from the Caspian Sea, although it has no pipelines of its own.

The government plans to raise $500 million from its first Eurobond issue, expected this year, the government said in May. The money will be used to help repay debt owned to Russia.

Another driver for Armenia’s outlook revision, Moody’s said, was Armenia’s continued access to external funding sources on favorable terms, “including via private remittances, foreign direct investment (FDI) and official lending sources.”

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