UPDATE 1-S&P raises Ukraine's outlook as IMF bailout boosts economy

Fri Jul 11, 2014 1:16pm EDT

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July 11 (Reuters) - Standard & Poor's revised its outlook on Ukraine to stable from negative, saying that the International Monetary Fund program adopted in April has helped improve the economic situation in the country.

However, the agency noted that the IMF program could be impacted by geopolitical risks and a severe recession.

"Full disbursement of the International Monetary Fund program and related multilateral lending should enable Ukraine to meet its external financing needs over the next year," the ratings agency said in a statement. (bit.ly/1jjUXau)

Ukraine said on Wednesday it remained confident of receiving further aid under the bailout program and appealed to Western institutions and donors for further cash and credit.

Standard & Poor's also said the new government under Prime Minister Arseny Yatseniuk had been stable and "relatively cohesive".

The IMF's board signed off on a $17 billion two-year aid program for Ukraine in April to help the former Soviet republic's economy recover after months of upheaval.

The ratings agency said on Friday that it did not expect the geopolitical environment to stabilize in the short term.

Standard & Poor's affirmed the 'CCC' long-term foreign currency sovereign credit ratings. (Reporting By Narottam Medhora in Bangalore; Editing by Sriraj Kalluvila)

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