S&P raises Serbia's long-term rating to BB.

By bne IntelliNews March 17, 2011
International rating agency Standard & Poor's raised Serbia's long-term local and foreign currency credit rating from BB- to BB with a stable outlook, Tanjug news agency reported. S&P affirmed the B short-term local and foreign currency credit ratings, as well as Serbia's 4 recovery rating, while the outlook remained stable. The move reflects Serbia's improved economic policies, as well as a new momentum in fiscal consolidation, structural reform and economy rebalancing. Reaching political consensus over EU integration and expected policy measures that will be taken in this respect have been supportive of the ratings upgrade as well, S&P noted. The agency also pointed out the weaknesses of the Serbian economy stemming from relatively high external debt, limited effectiveness of monetary policy due to high euroisation of the economy and high inflation. S&P also said that populist moves ahead of the upcoming elections next year and a shift in government policies after the vote could negatively affect Serbia's rating. We recall that Fitch Ratings revised its outlook on Serbia from negative to stable in November last year.
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