Russia's expected accession to the World Trade Organization (WTO) will help the country boost growth and diversify its economy, reduce its exposure to commodity price shocks and ensure better access to non-commodity export markets, Fitch Ratings said on Tuesday.
"Over the medium term, if the obligations of WTO membership are fully respected, accession should also improve confidence in the poor business climate, encouraging foreign direct investment, diversification, and potential growth," Fitch said in a statement.
In early September, the agency affirmed Russia's BBB rating with a positive outlook, noting that structural reforms to improve the business climate, banking sector and governance would have a positive influence on the rating.
But the agency also warned that a delay in fiscal adjustment could lead to a rating downgrade.
“A severe and sustained drop in oil prices could lead to negative rating action. Diversification resulting from WTO membership should reduce the impact of such an oil price shock," Fitch said.
Russia has been working to join the WTO since 1993. The last remaining obstacle for its entry has been Georgia, which has refused to approve Russia's entry ever since the two countries fought a brief war in August 2008 , when Georgia attacked South Ossetia to bring it back under Tbilisi's central control. After the war, Russia recognized the independence of South Ossetia and another former Georgian region, Abkhazia.
