Credit rating agencies, Fitch and Moody’s, have maintained Serbia’s credit ratings amid ongoing political and economic instability. While S&P upgraded Serbia’s rating to investment grade last year, Fitch and Moody’s have not followed suit. Fitch has kept Serbia’s rating at BB+ with a positive outlook, but acknowledged political uncertainty as a potential risk. Moody’s, on the other hand, has rated Serbia two steps below investment grade at Ba2, but with a stable outlook.
The political crisis triggered by the deadly Novi Sad train station accident, followed by protests and the resignation of Prime Minister Miloš Vučević, has raised concerns. Both Fitch and Moody’s have expressed that these protests could affect Serbia’s fiscal policies, delay reforms, and deter foreign investment.
Pavle Medić from the Center for Advanced Economic Studies points out that credit agencies are slow to change ratings and closely monitor political stability. He notes that while Fitch has recognized Serbia’s solid economic growth, it has also highlighted political risks. Similarly, Moody’s has been cautious in its assessments, signaling that prolonged protests could harm investment confidence.
Investment banker Milutin Nikolić attributes Serbia’s economic difficulties to the downturn in the Eurozone, especially Germany’s recession, rather than protests directly. He stresses that Serbia’s economy is heavily influenced by the EU, and without significant structural changes, it will continue to struggle. Nikolić also criticizes the inefficiency and corruption within Serbia’s state-run economy, emphasizing that reforms are needed to improve the economic outlook.
For Serbia’s credit rating to improve, experts suggest that political stability and structural economic changes are key. However, the current situation indicates that Serbia may remain in a cycle of economic dependency on the EU, making it difficult to break free without comprehensive reforms.
