© Reuters. People walk past a residential building heavily damaged during Ukraine-Russia conflict in the southern port city of Mariupol, Ukraine May 20, 2022. REUTERS/Alexander Ermochenko/Files

(Reuters) – Global ratings agency S&P on Friday cut Ukraine’s sovereign rating to ‘CCC+/C’ from ‘B-/B’, citing a larger fallout from Russia’s military attack on the country.

“Substantial damage to Ukraine’s economy and tax-generation capacity has made government debt payment more dependent on international financial support,” the agency said in a statement.The ratings agency said it expected Ukraine’s real gross domestic product to contract by 40% if the conflict persists in to second half of 2022.

It also assigned a negative outlook, saying risks from the military conflict could undermine the government’s ability to meet its debt obligations.

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