17:45 - 22.06.2023

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June 22, Fineko/abc.az. If geopolitical tensions escalate into full-scale military actions, it could undermine Armenia's domestic policy and worsen the country's economic and fiscal prospects.

ABC.AZ reports that this is stated in credit rating agency Moody's forecast on Armenia.

The international agency noted that the Russian-Ukrainian war caused structural changes in the security architecture of Armenia. Over the past year, the geopolitical risks for Armenia have increased. The decline in Russia's regional presence over the past year coincided with an increase in the frequency and intensity of military clashes between Armenia and Azerbaijan over disputed regions. These skirmishes led to serious clashes between the two countries in the 2nd half of 2022. The frequency and intensity of military tensions remain high.

"In the near future, long-term settlement of the conflict between Armenia and Azerbaijan will not be possible. Tensions between the two countries will remain high, but the likelihood of escalating into full-scale hostilities is low. The growing involvement of the EU and the U.S. in the region is likely to help prevent a full-scale conflict," Moody's added.