Moody's changes outlook on Serbia's sovereign rating to positive from stable, affirms B1 rating

Moody's Investors Service ("Moody's") has today changed the outlook on the Government of Serbia's rating to positive from stable and affirmed the B1 long-term issuer and senior unsecured debt ratings.

Moody's decision to assign a positive outlook to Serbia's B1 rating reflects the authorities' commitment to addressing the deterioration in the sovereign's debt burden through:

(1) the implementation of structural reforms and enhancements in institutional quality against the backdrop of IMF technical assistance and progress in EU accession; and

(2) a fiscal consolidation programme which is expected to improve Serbia's fiscal outlook

The affirmation of Serbia's B1 rating balances a range of factors, including the forecast improvement in Serbia's growth prospects and the fiscal consolidation under way, against the continued rise in the government's debt burden with debt projected to peak at slightly less than 80% of GDP in 2016, and external risks stemming from Serbia's high external debt.

The B2/NP long-term and short-term foreign-currency deposit ceilings and the Ba2/NP long-term and short-term foreign-currency bond ceilings remain unchanged.