The credit rating agency Moody’s has upgraded the outlook on Serbia’s rating to positive from stable and affirmed the Ba3 rating, the National Bank of Serbia announces.
Moody’s decision to upgrade Serbia’s rating outlook is supported by the accelerated reduction in the public debt-to-GDP ratio, as well as the country’s robust medium-term economic growth outlook.
Sound foundations based on the strengthening of domestic factors will additionally support the improvement in Serbia’s fiscal indicators, Moody’s said.
Want to open a company in Serbia? Click here!
According to Moody’s, in the period since the last rating upgrade in 2017, Serbia’s fiscal metrics have been improving at a faster pace than expected. The agency also noted continuous surpluses of the general government budget and has confidence that fiscal stability will be maintained in the period ahead – both on the back of strict control of current expenditure and economic growth and strong tax revenue generation.
Moody’s expects Serbia’s public debt to be below 50% of GDP by the end of 2020, which would make Serbia a country with the fastest debt-to-GDP ratio reduction in five years (by 21 percentage points) compared to countries with a similar credit rating.
Moody’s expects that the manufacturing sector will continue to attract foreign direct investment, strengthening Serbia’s export potential. The rise in private investment, as an important component of sustainable growth, will be supported by strengthening of the banking sector, alongside a sharp reduction in non-performing loans achieved in the prior period.
As stated by Moody’s, since 2015 Serbia has implemented numerous structural reforms, including in the labour market and the public enterprise sector, creating solid foundations for sustainable economic growth. The agency particularly highlights the commitment of the Serbian Government to preserving the ongoing broad economic policy continuity, which is recognized as the key factor for a credit rating upgrade in the coming period.
This post is also available in: Italiano