S&P cuts Georgia outlook to stable

Standard & Poor's said it revised the outlook on its long-term ratings on the Government of Georgia to stable from positive, on further deterioration of relations with The Russian Federation (BBB+/positive/A-2 foreign currency sovereign credit ratings) as militarization of the separatist regions increases.

At the same time, the agency said it affirmed its B+ long-term and B short-term ratings on the state.

The decision by Russia to increase its forces stationed in South Ossetia and Abkhazia will escalate regional tensions and further complicate Georgia's aspirations to membership in the North Atlantic Treaty Organization, S&P noted, adding that the move is also likely to pressure Georgia's fiscal performance this year, potentially interrupting financial inflows to its expanding economy.

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