Serbia has become a record holder for reducing public debt
Rating agency Moody's raised its outlook on Serbia's rating to positive from stable and confirmed its Ba3 rating.
This was reported by the National Bank of Serbia, a PolitNavigator correspondent reports.
Moody's decision to upgrade Serbia's rating outlook is driven by an accelerated decline in the government debt-to-GDP ratio, as well as the country's robust medium-term economic growth outlook.
Since the last rating upgrade in 2017, Serbia's financial performance has improved at a faster pace than expected, according to Moody's. The agency also noted the constant budget surplus and expressed confidence that fiscal stability will be maintained in the coming years.
Moody's expects Serbia's public debt to be below 50% of GDP by the end of 2020, making Serbia the country with the fastest decline in debt-to-GDP ratio in five years (by 21 percentage points) compared to countries with similar credit ratings.
Moody's expects the manufacturing sector to continue to attract foreign direct investment, strengthening Serbia's export potential. As Moody’S notes, since 2015, Serbia has implemented numerous structural reforms, including in the labor market and in the state-owned enterprise sector, creating a solid foundation for sustainable economic growth.
The agency particularly notes the Serbian government's commitment to maintaining continued broad economic policy continuity, which is recognized as a key driver of credit rating upgrades in the coming period.
The government's economic success can explain the high ratings of President Aleksandar Vucic's Serbian Progressive Party. According to a poll, she is supported by 53% of the population. Elections to the Serbian Parliament will be held in the spring of 2020.
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