Serbia is on the verge of a significant development regarding its credit rating outlook. It is anticipated that today, Standard & Poor’s (S&P), the renowned credit agency, will revise Serbia’s credit rating outlook. The current rating stands at BB+ with a stable outlook, and there’s speculation that it will transition to BB+ with a positive outlook.
This shift toward “positive prospects” signals a potential move closer to BBB-, the first level of the investment rating. Zoran Grubišić, the dean of the Belgrade Banking Academy, shared his expectations with Biznis.rs, expressing that while he foresees a shift to a positive outlook, he remains cautious about achieving an investment rating by year-end.
Grubišić analogizes the difference between BB+ and BBB- to the distinction between “Bologna” and “non-Bologna” master’s degrees, illustrating that despite similar competencies, there’s a perceptible gap in status. He emphasizes that this disparity is particularly pertinent for equity investors, as it impacts risk perception.
For Serbia, maintaining cooperation with rating agencies like S&P, Fitch, and Moody’s is essential for assessing creditworthiness for borrowing. Currently holding a BB+ non-investment rating from S&P, Serbia’s ability to meet financial obligations is acknowledged, albeit with risks associated with economic conditions and credit.
Striving for an investment BBB- rating signifies a satisfactory ability to meet financial obligations with moderate credit risk. While Serbia has made progress, transitioning from a B+ rating in 2004 to BB+ with positive prospects in December 2021, achieving investment grade remains a significant milestone.
Grubišić suggests that although the outlook may shift to positive today, the path to an investment rating may take longer, given global interest rate dynamics and associated risks. Nonetheless, the endeavor toward this goal, as emphasized by NBS Governor Jorgovanka Tabaković, underscores Serbia’s commitment to attracting investments and enhancing its position on the global investment map.
