S&P Global Ratings revises prospects for improving Serbia's credit rating

The agency for evaluation of credit rating S&P Global Ratings confirmed the credit rating of the Republic of Serbia as "BB-" and revised prospects for improving credit rating from stable to positive.

The main reasons for the improvement of the credit rating of the Republic of Serbia are successful implementation of the fiscal consolidation program and opportunities for further improvement, the Ministry of Finance reported.

S&P Global Ratings believes that the commitment of the Government of Serbia to reducing expenses and a better revenue collection will help stabilize the fiscal deficit in the medium term.

According to the agency, the positive fiscal trends are a result of a better collection of tax revenues, primarily from value added tax and excise duties, as well as of non-tax revenues.

The agency estimates that the Republic of Serbia recorded a real growth of 2.7% in 2016, primarily based on the growth of investments.

The rating agency points out that the Republic of Serbia has improved its balance of payments position and it is expected that the deficit of the current account deficit will be reduced to below 4% of GDP in 2016, compared to 8% of GDP on average for the period from 2011 till 2014.

The current account deficit is projected at the level of 3% of GDP on average for the period from 2017 to 2019.

The improvement of the balance of payments position is primarily due to the growth of net exports, the report says.

Standard & Poor's New York

Ministarstvo finansija Republike Srbije

Vlada Republike Srbije

S&P Global Ratings

Ministry of Finance

credit rating of Serbia

Government of Serbia

fiscal consolidation

fiscal deficit

economic growth of Serbia

growth of GDP of Serbia

balance of payments position of Serbia

export

current account deficit of Serbia