S&P affirms BB/B ratings on Serbia, stable outlook

Standard & Poor’s (S&P) says it affirmed its long and short-term foreign and local currency sovereign credit ratings on Serbia at 'BB/B', with a stable outlook.

Izvor: Tanjug

Friday, 16.03.2012.

21:54

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Standard & Poor’s (S&P) says it affirmed its long and short-term foreign and local currency sovereign credit ratings on Serbia at 'BB/B', with a stable outlook. S&P stated that the ratings on Serbia are constrained by their view of vulnerabilities emanating from its high external debt, sizable current account deficits, and limited monetary flexibility due to the euroization of bank deposits and claims. S&P affirms BB/B ratings on Serbia, stable outlook However, the ratings are supported by Serbia's moderate government debt levels, which S&P expects will be slightly above 45% of GDP at end-2012 (compared to 67% in 2003), and by its EU candidate status. "We expect that the next government, following the May 6, 2012, parliamentary election, will prioritize fiscal consolidation and the ongoing key structural reforms already committed to under the 2011 Stand-By Arrangement (SBA) with the IMF," it was said. "In light of our projections for weak eurozone activity, we expect that Serbia's GDP growth will average 0.5% in 2012, although there are considerable uncertainties surrounding this projection. We anticipate net exports and a gradual recovery of domestic demand will contribute to trend GDP growth returning to 4% by 2014," the statement concludes. Tanjug

S&P affirms BB/B ratings on Serbia, stable outlook

However, the ratings are supported by Serbia's moderate government debt levels, which S&P expects will be slightly above 45% of GDP at end-2012 (compared to 67% in 2003), and by its EU candidate status.

"We expect that the next government, following the May 6, 2012, parliamentary election, will prioritize fiscal consolidation and the ongoing key structural reforms already committed to under the 2011 Stand-By Arrangement (SBA) with the IMF," it was said.

"In light of our projections for weak eurozone activity, we expect that Serbia's GDP growth will average 0.5% in 2012, although there are considerable uncertainties surrounding this projection. We anticipate net exports and a gradual recovery of domestic demand will contribute to trend GDP growth returning to 4% by 2014," the statement concludes.

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