Progress in the peace process with Azerbaijan could further
strengthen Armenia’s sovereign credit profile, Fitch Ratings said,
revising the outlook on Armenia’s Long-Term Foreign-Currency Issuer
Default Rating (LTFC IDR) to Positive from Stable while affirming
the rating at ‘BB-’, Azernews reports.
In its latest assessment, Fitch pointed to a joint declaration
signed by Armenia and Azerbaijan aimed at reaching a comprehensive
peace agreement, noting that the move has significantly reduced
near-term risks of military escalation. The agency highlighted that
trade with and through Azerbaijan has begun to open, while
relations with Türkiye are substantially improving, with reports
that Ankara is considering reopening its land border with
Armenia.
Fitch said these developments could generate additional upside
to Armenia’s medium-term growth outlook, particularly if the peace
agreement is implemented in a sustained manner and regional
connectivity is restored through the reopening of borders and
transport routes.
At the same time, the agency warned that negative rating action
could follow if geopolitical risks increase or if political and
economic stability is undermined—specifically citing the derailment
of the current peace process with Azerbaijan as a key downside
risk.
Conversely, Fitch identified a durable decline in geopolitical
risk and domestic political uncertainty as a potential trigger for
a future upgrade, again emphasizing that meaningful progress in the
peace process with Azerbaijan would be central to such a
scenario.
The rating agency’s comments come against the backdrop of a
high-profile diplomatic breakthrough on August 8, 2025, in
Washington, where President Ilham Aliyev, US President Donald
Trump, and Armenian Prime Minister Nikol Pashinyan signed a joint
declaration. One provision of the document предусматривает the
launch of the “Trump Route for International Peace and Prosperity”
(TRIPP), designed to unblock regional communications.
During the same meeting, Azerbaijan’s Foreign Minister Jeyhun
Bayramov and Armenia’s Foreign Minister Ararat Mirzoyan initialed
the draft “Agreement on the Establishment of Peace and Interstate
Relations between the Republic of Azerbaijan and the Republic of
Armenia” and jointly appealed to the current OSCE
Chairperson-in-Office to terminate the OSCE Minsk Group process,
marking a symbolic shift away from the long-standing mediation
format.
Overall, Fitch’s assessment underscores how regional
normalization and reconciliation with Azerbaijan are increasingly
seen not only as political milestones for Armenia, but also as key
drivers of economic confidence and sovereign creditworthiness.