Fitch Ratings has downgraded Serbia’s credit rating to B+, with a stable outlook, the Serbian Ministry of Finance announced on Friday.
The agency stated in a press release that the previous rating of BB-, with a negative outlook, was lowered to B+ due to the projected increase in the budget deficit in 2014 based on previously undertaken obligations, as well as the state of public debt in relation to the gross domestic product, and the absence of announced structural reforms.
Fitch positively assesses the commencement of negotiations with the European Union, the reduction of the current account deficit, and the increase in foreign exchange reserves, as well as the beginning of negotiations with the IMF, planned for February.
The Serbian Ministry of Finance stated in this regard that the continuation of structural reforms is essential for stabilizing public finances and creating a healthy foundation for the growth of the Serbian economy. As initial steps in this direction, it highlights economic growth for 2014 being higher than expected, as well as the reduction of inflation in the previous year and the increase in exports that contributed to the reduction of the deficit.
The Ministry also notes that it will continue to insist on a package of measures that would enable the reduction of the fiscal deficit, stabilize the share of public debt in GDP, and ensure economic growth in the coming years.
