Moody’s Agency Increases Serbia’s Credit Rating

The rating agency Moody’s has increased the credit rating of Serbia from Ba3 to Ba2, with a stable outlook toward further improvement, the Ministry of Finance of Serbia announced.

– The main factors which have contributed to the improvement of the credit rating are the resilience of the Serbian economy to the consequences caused by the coronavirus pandemic, a stable level of mid-term growth, as well as the expectations that the Government of Serbia’s measures of fiscal consolidation will continue being above average for the group of countries with the Ba credit rating – the press release says.

Serbian Finance Minister Sinisa Mali pointed out that Serbia was one of the rare countries in the world that had managed to have its credit rating raised and not lowered during the coronavirus pandemic.

– In the conditions of great uncertainty and in the midst of the global economic crisis, we have shown great responsibility and provided support to the economy and the citizens with an all-encompassing aid package. We have preserved the jobs, maintained the production capacities and sent a strong signal to everyone in the world that Serbia is still a stable country, with a responsible economic policy – Mali claims, as announced by the ministry.

He added that the good news did not come as a surprise, but as a confirmation of the expectations and good results in the preceding years.

– International investors are interested in our capital market and our bonds, which are beginning to be seen as reliable and liquid. The investors already see us as an investment destination, so our bonds are already more highly valued in the market as well. We are getting closer to an investment rating at an increased pace, which will be a great achievement for our country, but also important news for our business people and citizens – Mali said.

According to the agency’s rating, the average growth rate in 2018-2019 was 4.4%, whereas the drop of the GDP in 2020 was only 1%, which is better than all the other countries in the Ba rating group.

– According to the agency’s press release, the decision on increasing the credit rating of Serbia was made based on a stable economic policy, directed at the further boosting of macroeconomic indicators and reduction of public debt after the pandemic – it is said.

The arrangement with the IMF has also made an important contribution to the achieved macroeconomic stability. Within that program, Serbia achieved progress in reducing the fiscal risks which come from the sector of small and medium enterprises and successfully carried out the privatization program.

– The agency estimates that the trend of the GDP growth will continue in 2021, with a real growth of the GDP of 4.7%, thanks to the recovery of domestic demand, the normalization of economic activities thanks to the quick vaccination process and the important capital investments planned for 2021.

Ministarstvo finansija Republike Srbije

Međunarodni monetarni fond - MMF Beograd

Moody s

Siniša Mali

credit rating

Ba3

Ba2

GDP

GDP growth

IMF arrangement