The National Bank of Serbia (NBS) announced today the Fitch rating for Serbia’s long-term foreign- and local-currency issuer default ratings (IDR) remains at ‘BB’ with stable outlook. This is based on the assessment that Serbia’s economic policy continues to strengthen macroeconomic fundamentals, improving the business environment and reducing public debt, NBS press release states. Inflation remains low and stable, and Fitch expects it to move within the target tolerance band in the coming period, approching 3% in 2019. In addition to price stability, Fitch also highlights improvements in the banking sector – higher asset quality and capital adequacy and the results achieved in terms of reducing NPLs which are currently at their lowest level since the monitoring of NPL ratio began.
Serbia’s GDP growth in the first half of the year was better than expected – a 4.9% increase compared to the same period last year, driven by investment and consumption growth. This is why Fitch revised the country’s growth forecast for 2018 from 3.5% to 4.3%. It is also expected that Serbia’s public finances will remain in surplus this year. Fitch also expect that the reduction of public debt share in GDP will continue