Agencies Fitch and S&P upgrade Serbia's credit rating

The credit rating agencies Fitch Ratings and Standard and Poor's have ungraded the credit rating of Serbia to BB, with a stable outlook for an improvement of the credit rating, the Ministry of Finance announced on Friday, December 15, 2017.

The press release says that the upgrade of Serbia's credit rating by Fitch Ratings was a reflection of improved public finances, also supported by the fiscal result.

Fitch expects the Government of Serbia to continue carrying out the program of fiscal consolidation and structural reforms in the period from 2018 till 2019.

The agency points out that the public debt/GDP ration has improved and that it is stable and, after a considerable drop to 63.6% in 2017, Fitch expects a further drop to 62.1% in 2018 and to 60.6% in 2019.

They also point out that the current account deficit (estimated at an average of 4.3% of the GDP in the period from 2017 till 2019) will be fully covered by net foreign investments, the press release says.

At the same time, Standard and Poor's estimates that the GDP will continue growing in the period from 2018 till 2020 and that the growth will be based primarily on an inflow of foreign direct investments and greater private consumption, which will be stimulated by a growth of the employment rate and salaries and a stable inflow of money transfers.

Despite the expected increase of salaries in the public sector in 2018, an average fiscal deficit of around 1.5% is projected for the period from 2017 till 2020.

In addition to a reduction of the current account deficit, Standard and Poor's expect that the structure of the external debt will improve and that the net inflow of direct foreign investments in the upcoming period will fully cover the payment balance current account deficit, the press release points out.

Ministarstvo finansija Republike Srbije

Fitch Ratings New York

Standard & Poor's New York

Vlada Republike Srbije

Fitch Ratings

Standard and Poors

S&P

credit rating of Serbia

credit rating

GDP of Serbia