Mali: Another credit rating increase, a path to a better position in the world market
The rating agency “Standard & Poor’s” has upgraded the credit rating of the Republic of Serbia from “BB” to “BB +”, with a positive outlook for further improvement. According to Finance Minister Siniša Mali, this is the best award at the end of 2019, since thanks to that, as well as to the previous estimates, Serbia will be even better positioned in the global financial market, and will reach an investment rating faster.
“One of the world’s largest rating agencies has confirmed our good results. They particularly praise us for lowering the level of public debt, and for reducing the share of dollar debt, thanks to the successful issuance of Eurobonds on the international financial market. In addition, they praise our fiscal results, i.e. the budget surplus, as well as the level of foreign direct investment, which is particularly important to us. Thanks to this increase, we are now one step away from our investment rating, and, thus, we believe that we will reach it next year. It is of utmost importance that we continue with good results”, Minister Siniša Mali said.
He says he is particularly pleased that the rating agency has recognized Serbia’s potential for further enhancement of its credit rating.
“They point out that further increase our country’s rating within the next 12 months is possible, which entails that we need to work even harder and to focus even more on improving the economic system. Primarily, it is necessary to further improve the conditions for bringing in foreign investments, which is what we are working on, especially taking into consideration the investment plan, since by building roads, railways and other infrastructure, we will enable faster and easier movement of goods”, said Mali.
According to him, the agency’s estimates of GDP growth are encouraging.
“Despite persistent weaknesses in the eurozone, they estimated that Serbia’s GDP would continue to grow, and that, by the end of this year, it would increase to 3.6 percent and, during the next year, up to 4 percent. This indicates that we have properly planned the next year’s budget, which predicted a growth of 4 percent, as well as the fact that it was planned on a realistic basis, “Mali concluded.
He added that the rating increase is important news for all citizens of Serbia, but also for businesses and the economy in general.
“This, for all citizens, means lower interest rates as well as better financing conditions for businesses. This is the best confirmation that the country’s risk is being reduced, which is what banks estimate when determining interest rates. In the long run, the benefits that we, as a state, will receive are multiple, as all of this encourages businesses to invest more, to produce, to expand capacity, and to employ people, all of which lead to an even more robust economic growth”, said Mali.
The Minister stated that, thanks to these estimates, domestic products will be even more competitive on the foreign market, because modernization of production, and cheaper lending, will result in lower price of the product and its easier sale on the foreign market.
Mali states that all the benefits that Serbia has have been recognized, which primarily entail an educated workforce, favorable conditions for foreign investment, and various tax reliefs.
“Serbia is now a stable and predictable market, and by continuous improvement of services, such as constant digitalization with the aim of simplifying business registration or issuing building permits, we are speeding up procedures and making both domestic and foreign investors able to operate without tension and unnecessary red tape”, Mali concluded.