S&P Lifts Serbia's Rating Outlook To 'Stable'

(RTTNews) - Rating agency Standard & Poor's raised Serbia's credit rating outlook to "stable" from "negative" on Friday, citing commitment to reform.

"The stable outlook reflects our view that Serbia's improving economic outlook balances risks associated with its large external financing needs, high general government debt, and limited monetary policy flexibility," S&P said in a statement.

The country's 'BB­/B' long­ and short­term foreign and local currency sovereign credit ratings were affirmed.

The outlook revision reflects the view that risks to Serbia's ambitious fiscal consolidation and structural reform program have subsided somewhat, the agency noted.

Further, the agency said the government continues to tackle structural issues in the economy and public sector amid signs of an investment-fueled modest growth. These developments should foster investor confidence and support Serbia's still ­significant external financing needs, S&P added.

The ratings may be raised if the government perseveres with fiscal consolidation and implements structure reforms, builds a track record of effective economic and fiscal management, and continues Serbia's economic and institutional integration with the EU.

On the other hand, ratings could be downgraded if the reform momentum falters and a deterioration in the conditions needed to fulfill external financing needs emerges, the agency warned.