Fitch revises Serbia's outlook to positive; affirms BB+ rating

Fitch Ratings announced Friday it revised Serbia's outlook to positive from stable, and affirmed its BB+ rating.

The revision reflects the country's strengthening credit fundamentals, investment to drive growth, expected economic growth above trend and falling government debt, it said.

The general government balance was in a small surplus in the first half of 2024, due to revenue outperformance, but the government has maintained the 2024 deficit target of 2.2% of GDP, it added.

The rating agency said inflation returned to the central bank's target range of 3% in May, but came in at 3.8% in June, reflecting lower food prices, energy prices dropping out of the annual comparison, lower imports, easing real wages and tighter monetary policy.

Fitch said it forecasts inflation to average 4.4% this year, 3.6% in 2025 and 3.2% in 2026.

The agency expects economic growth to stand at 3.8% in 2024, adding: "Successful implementation of infrastructure projects may provide some upside.”

Fitch estimates Serbia's economic growth to be above trend in 2025 and 2026 due to high investment.