Serbia has a lot of work to do in order to leave the “junk” rating

Serbia currently has an investment rating of BB, and it only needs to skip rating BB+, the last that is considered as non-investment or junk, in order to get a passing grade BBB.

In December 2017, the Fitch Ratings credit rating agency increased Serbia’s credit rating from BB- level to BB, with stable odds for further improvement. Fitch confirmed the same credit rating level to our country in last year’s November. Besides that, Serbia also received evaluation that there are positive odds for further improvement, and that is not negligible.

The situation looks much better when compared to the one four years ago, when Serbia had rating BB- in January 2015 and negative odds for improvement, but it is difficult to say whether it is realistic to expect entrance to the list of countries that have an investment rating as soon as next year.

Professor at Belgrade based Faculty of Economics Dejan Soskic has stated with the “Danas” daily that credit rating BBB is not easily achievable, thus countries that reach that level of credit rating are considered to have entered the group of countries of so called investment rank.

“As a general rule those are well-regulated countries with strong institutions, the rule of law, stable both from fiscal and financial perspective and with relatively dynamic and competitive economy. I think that Serbia lacks a lot in the above mentioned domains, in order for it to expect realistic improvement of its credit rating to BBB level in such short time,” Soskic points out.

The European Union has been pointing out some of those drawbacks for years, which are very weak institutions and absence of state of law and the rule of law.

Izvor: Danas

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