December 15 (SeeNews) - Standard & Poor's (S&P) has affirmed Serbia’s long-term foreign and local currency sovereign credit rating at BB+, with a stable outlook, the Serbian central bank said.
A key factor for the credit rating affirmation is the preservation of price, exchange rate, financial and fiscal stability, as well as the orderly public finances and FX reserves which create ample room for Serbian authorities to undertake adequate measures and support the economy during the pandemic, the central bank said in a statement on Monday.
S&P also underlines that the credit rating is supported by a credible monetary policy framework, high capital adequacy, a reduction in the non-performing loan (NPL) ratio to 3.4% in September and the capacity of the financial system to fully support economic growth, the central bank said.
"The preserved credit rating of Serbia during the pandemic, a continued foreign direct investment (FDI) inflow and the lowest price of borrowing achieved in the international financial market, are the concrete confirmation of the investors and rating agencies' confidence in Serbia's favourable macroeconomic outlook," governor Jorgovanka Tabakovic said in the statement.
S&P has revised up Serbia’s GDP growth projection from -3.5% to -1.5%, and expects more than full recovery next year at a 4.5% growth rate. The agency states that the 2021 budget aims to gradually return public finances toward balance and contribute to the projected decrease in the share of public debt in GDP, along with the continued increase in capital investment in infrastructure projects, the central bank noted.
In May, S&P downgraded the outlook on Serbia's 'BB+' long-term and 'B' short-term sovereign credit ratings to stable from positive due to the impact of the COVID-19 crisis.