[ad_1]
The rating agency Standard and Poor’s confirmed the rating of the Republic of Serbia’s credit rating at BB + level and maintained a stable outlook for its further increase.
Source: B92.net
Photo: Depositphotos / SergeyNivens
Consistency in the implementation of a responsible economic policy has paid off, so Serbia still remains in the group of rare countries whose credit rating has not been lowered in 2020, according to a statement from the Ministry of Finance.
The agency claims that thanks to the successfully implemented structural reforms and consolidation and fiscal discipline measures, good foundations have been created for sustainable economic growth and that the Republic of Serbia has entered this crisis prepared and with well balanced finances.
It is noted that the reduction in public debt in the previous period created sufficient fiscal space to be able to support additional indebtedness for a package of economic support measures and economic recovery from the negative impact of the pandemic, which also slowed the economic decline of the Serbian economy.
Likewise, the successful monetary policy measures implemented in previous years have resulted in stable and low inflation, which is below 2%.
The report notes that the potential economic damage from the shock caused by the coronavirus pandemic has been mitigated thanks to a joint package of support measures from the Government of the Republic of Serbia and the National Bank of Serbia, amounting to almost 13%. of GDP.
The measures aimed at preserving the production capacities of the entire economy, maintaining the population’s standard of living, and providing liquidity to all economic entities, significantly helped to mitigate the immediate consequences of the pandemic, but also to create conditions for a recovery. faster economic and dynamic growth in 2021. years.
In addition, the National Bank of Serbia reduced the benchmark interest rate by 100 basis points accumulated to 1.25% during 2020 and increased the liquidity of the banking sector through financial swap and repo operations.
|
Due to the need to finance measures to support the economy and citizens in order to reduce the impact of the crisis in 2020, there was only a slight temporary increase in the share of public debt in gross domestic product and it is expected that next year the public debt returns to the previous decrease. trend.
Foreign direct investment in the previous period was more than enough to fully cover the current account deficit. Furthermore, Standard and Poor’s asserts that over the past decade, foreign investment in Serbian production has generated higher income and diversification of the export basket.
The agency claims that the banking system and the dinar exchange rate have remained stable, that foreign exchange reserves are at a record level, and that the level of problem loans has dropped significantly from 22% in 2015 to 3.40% in 2015. total at the end of September 2020. years.
Standard and Poor’s estimates a minor economic decline this year of 1.5%, compared to the 3.5% previously projected in May, and that the Republic of Serbia will achieve significant economic growth of 4.50% next year.
If the increase in the inflow of foreign direct investment continues, as well as the improvement in the balance of payments, the growth of export earnings and the increase in the level of foreign exchange reserves, despite all the risks, the conditions would be created to increase the credit rating of Serbia.
[ad_2]
