In the latest round, IHS Global Insight has downgraded Serbia’s short-term sovereign credit rating to 45 points (equivalent to BB+ on the generic scale), from a previous figure of 40 points.
Although our medium-term rating currently remains steady at 50 points (equivalent to BB-), we shifted our outlook for both the short-term and medium-term ratings to Negative. The September short-term downgrade was driven by rising interest payments, as the deteriorating budget situation contributed to an interruption of the country’s loan agreement with the International Monetary Fund (IMF) earlier this year, and prospects for a new deal in the next several months are limited. An IMF mission to Serbia on 10-14 September warned that before it will consider opening talks on a new loan, the government must rein in spending and restore central bank independence.
Source Balkans
