Moody`s upgrades Serbia’s rating

The credit rating agency Moody’s has upgraded Serbia’s long-term issuer and senior unsecured ratings to Ba3 from B1. The outlook has been moved to stable (from positive) – Serbian Ministry of Finance reports.

The main reasons for this upgrade were successful implementation of fiscal consolidation which has lowered the increase of debt burden in the national GDP, and structural reforms which have increased the resilience of the Serbian economy.

Moody’s goes on to say that positive fiscal trends in the country have resulted in the general government deficit reaching 1.4% of the national GDP which was far lower than the estimated 4% target for the 2016 budget. Furthermore, Serbia has recorded the 2.8% growth in 2016 which is the highest growth rate in the last eight years.

According to Moody’s estimates, the growth this year will be 3%, and will reach 3.3% in 2018. They also underline that, in 2016, Serbia had recorded the first primary budget surplus since 2005, “supporting a fall in the general government debt to GDP ratio to 74% of GDP at the end of 2016”.

Moody’s concludes its rationale behind the rating upgrade with: “Serbia could benefit from continued institutional improvements as part of the EU accession process. Progress on EU accession, which has continued through successive governments, has allowed Serbia to formally open 8 chapters out of a total of 35 since the formal start of accession negotiations in January 2014… The decision by the National Bank of Serbia to reduce the inflation target by 1pp to 3% (with a 1.5pp tolerance band) reflects the improved macro fundamentals, reduced inflation expectations and stronger credibility of the central bank. Moody’s expect an anchoring of inflation expectations at lower levels will help reduce longer-term interest rates and support potential growth.”

(Vecernje Novosti, 18.03.2017)

http://www.novosti.rs/vesti/naslovna/ekonomija/aktuelno.239.html:655584-Moodys-povecao-kreditni-rejting-Srbije

A small favour

Since 2013, Serbian Monitor has been offering to its readers carefully selected news about the Republic of Serbia, as a daily commitment stemming from the genuine desire to offer undistorted information about a country that is too often a victim of prejudice and superficiality. From November 2016, this service is available in English and Italian with a growing number of original articles with a goal of providing a complete picture of this Balkan country's economy, politics, culture and society. Our archive is completely free of charge, available to anyone who wants to get to know the country, to study its specific aspects, or to be constantly updated about it. This project will only be able to continue with the help of readers on whom we are calling to provide a small financial support so that we can continue supplying an increasingly expanding pool of information and original contributions. If you appreciate our work, please click on the button below.

This post is also available in: Italiano

Share this post

Leave a Reply

Your email address will not be published.

scroll to top