Moody’s Agency confirmed the credit rating of the City of Belgrade

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The international rating agency Moody’s has confirmed the credit rating of the City of Belgrade – “Ba2 stable”, said the Deputy Mayor of Belgrade Goran Vesić, Beoinfo reported. Vesić assessed that the confirmation of Belgrade’s credit rating and the agency’s report confirm that Belgrade is a financially stable city, which manages its finances domestically.

“This is confirmed by the fact that Belgrade owed 281 million euros on the last day of last year, and the budget for this year amounts to 1.365 billion euros. Only eight years ago, in 2013, Belgrade owed 1.2 billion euros, and the city budget was less than 600 million euros,” Vesić said.

The Moody’s report says that “the credit profile of the City of Belgrade (Ba2 stable) indicates strong fiscal management which has resulted in good financial performance and a recorded decline in the debt burden. Prudent management of the city budget in the previous period further supports the stable outlook. The advancement of tax revenues follows economic development, which is expected to recover with a real growth rate of about five percent of gross domestic product (GDP) in 2021, compared to partial stagnation of GDP from 2020 due to the pandemic,” the report states.

The agency predicts that real GDP growth in 2022 could amount to about four percent and expects that “Belgrade’s liquidity will improve” in 2021 and 2022.

“At the end of 2020, the account balance amounted to 86 million euros, and in the meantime there was an increase in the account balance and at the end of November 2021 it amounted to 130 million euros. The city’s cash reserves cover 2.8 times its needs for debt service maturing in 2022,” the report said.

According to the agency, Belgrade’s regular and predictable revenues and expenditures throughout the year, as well as its cash-generating capacity, provide enough cash to service the city’s debt in 2022, N1 reports.