Standard & Poor's raises Serbia's credit rating – A step closer to getting investment grade
– This speaks of the low level of investments in all kinds of assets, from government bonds to bonds issued by public and private companies. The macroeconomic foundations of Serbia have improved and, according to Standard & Poor's, they are on an upswing – Djuricin told Tanjug.
As he says, there are no visible risks of upsetting the fiscal balance, the growth is at a relatively high degree, the unemployment has dropped, and the coverage of the current balance deficit is full.
Djuricin also says that, in the medium term, Serbia is heading towards having the current deficit at around 5%, which can be easily covered by foreign direct investments and expansion of exports.
– So, the macroeconomic foundations of the system are better and they inform international investors that the risk of investing in our country is smaller than it was in the previous period – professor Djuricin emphasized.
What does lie ahead, he says, is for the country to find a way of turning the fiscal stability into sustainable economic development.
He says that Serbia needs to concentrate on several large priorities.
– We need to connect our most profitable resources with a development strategy. Serbia needs clear structural and industrial policies in the upcoming period, such as will increase the quality of our production, that, is, the degree of added value, keep the people with the highest qualification level and contribute to raising the overall technological level of the industry – Djuricin believes.
He said that “the price of our debt is already at 1.5% of the coupon rate, which is nearly fantastic” and added that, in general, the debt price was dropping everywhere around.
– I believe that this will not be a sustainable policy of the central banks of the USA, Japan and Europe in the long term, as an extra low reference interest rate runs against some fundamental principles of economics, and one of those principles is the temporal value of money – Djuricin says.
He expects things to be set up on different foundations and not on negative policy rates or potentially extra low interest rates in the upcoming period, especially when Europe starts investing more from the primary emission into RES and circular economy, energy and infrastructure.
– So, it's good to use this momentum and reorient from the policy of savings and balancing the income and the expenditures to a policy of intelligent development that would not lead us into the field of dubious finance – Djuricin concluded.
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