Moody's raises outlook on credit rating of Serbia

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Moody's decision to assign a positive outlook to Serbia's B1 rating primarily comes as a result of the implementation of structural reforms, enhancements in institutional quality, and a fiscal consolidation programme which is expected to improve Serbia's fiscal outlook.

This credit rating agency has assessed that a 2015 fiscal deficit of 3.8% of gross domestic product (GDP) significantly outperformed the targets in the IMF arrangement with Serbia.

Moody's also notes that the 2015 economic growth was above expected and driven by investments, adding that this trend is expected to continue in the years to follow.

Also, the current account deficit has narrowed and is expected to continue to be fully covered by FDI in the coming period, the release reads.

The agency has stated that the NBS carried out a special asset quality review to assess the resilience of banks in Serbia, stressing that August 2015 saw the adoption of the Strategy for Resolving Non-Performing Loans (NPL).