Fitch maintains Ukraine at 'CCC', expects war to extend into 2027

Global credit ratings agency Fitch on Friday maintained Ukraine's long-term foreign-currency rating at "CCC", deep in speculative territory, saying it expects the country's ongoing war with Russia to drag into 2027. The US is pushing to end the 4-1/2-year-old war that has escalated this year as Russia intensified aerial attacks and Ukraine targeted Russia's oil and gas sector. Peace negotiators are meeting next month for new talks.

Ukraine's sovereign ratings remain in speculative territory as the country relies heavily on foreign financial assistance to fund budget deficits and support the economy while continuing to defend against Russia's invasion.

Fitch said its rating reflects "substantial" credit risk given the war and its effects, balanced by a manageable near-term debt service profile, an improved level of foreign exchange reserves, and significant support from partners. Ukraine is likely to continue running large fiscal deficits due to high wartime spending and weak domestic revenue generation, while its economy is expected to contract marginally in 2026 before returning to growth of 0.2% in 2027, it added.

Fitch typically does not assign outlooks to sovereigns with a rating of "CCC+" or below.