In its report published on March 19, 2021, the credit rating agency “Fitch” confirmed the credit rating of Serbia at the level of BB + and kept stable prospects for its further increase, the Ministry of Finance announced.
The Minister of Finance, Sinisa Mali, pointed out that the excellent economic results of Serbia, achieved in the period before and during the pandemic, were once again recognized.
“This confirms that all economic measures that Serbia has taken since the beginning of the corona virus pandemic, as well as previous fiscal consolidation measures, have been successfully implemented. The great shocks caused by the corona crisis have been avoided, we have kept our jobs, and the state continues to reduce the consequences to a minimum, even with new economic measures,” said Mali.
The joint efforts of the Government of Serbia and the National Bank of Serbia, as well as the adopted comprehensive package of monetary and fiscal policy measures, which includes, among others, measures to support households, wage subsidies, a moratorium on loan repayments, interest rate cuts and liquidity support measures in the corporate sector, the effects of the crisis in Serbia have been significantly mitigated, the agency’s report states.
Minister Mali reminded that the maintenance of the Serbian economy was achieved by allocating a total of more than eight billion euros last year and this year to help citizens and the economy, as well as that the implementation of the third economic support package is underway.
The implementation of measures from the extensive package of support to the economy and citizens has preserved the level of employment in the economy, without increasing the unemployment rate.
The “Fitch Ratings” agency also recognized that the undertaken structural reforms created conditions for the growth of the inflow of domestic and foreign direct investments.
“Serbia has been an extremely attractive and desirable investment destination in recent years, and the fact that foreign direct investments, despite the pandemic, amounted to almost three billion euros last year, is a confirmation of that. No foreign investor gave up their investments during the pandemic, and that is a good confirmation of a favorable business environment,” said the Minister of Finance.
In its report, “Fitch” emphasizes that low and stable inflation was maintained, relative exchange rate stability, as well as a high level of foreign exchange reserves, which reached 13.6 billion euros at the end of January 2021.
The agency also emphasizes the role of the banking sector in reducing the shocks caused by the coronavirus pandemic.
It is stated that, due to the need to finance measures to support the economy and citizens, in order to reduce the impact of the crisis caused by the Covid 19 pandemic, in 2020 there was an increase in the share of debt in GDP.
“Fitch” predicts that the share of general government debt will temporarily reach 59.6% of GDP in 2021, and that the debt is expected to return to its declining trajectory as early as 2022.
The Agency already expects the recovery of the economy during the current year and estimates that significant economic growth of as much as 5.2% in 2021 and 4.5% in 2022 will be achieved.
Minister Mali reminded that the corona crisis is still not over, but that despite that, Serbia ended the previous year with excellent results.
“It is important to note that this year, despite the pandemic, we started with excellent macroeconomic indicators – public debt was at the level of about 52 percent, which is below the criteria prescribed by Maastricht, which is also a phenomenal result in conditions of general economic instability. In addition to the very small drop in GDP last year, Serbia rightly expects that the cumulative growth in the coming years will be the largest on the old continent,” he said.
The Government of Serbia will continue to take all necessary measures in the coming period in order to preserve the hard-won financial stability and strong public finances and ensure the highest possible economic growth that will lead to a better standard of living for citizens, the statement said, Politika reports.
