Credit Rating – Debt Ratings in Ukraine and Serbia Improved, Slovak Prospects Weakened

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The sovereign ratings of Ukraine and Serbia have improved, while the positive outlook for Slovakia has so far weakened.

Good Finance’s E-Money Global Ratings announced in London on Friday night that it has upgraded the global rating of Ukrainian long-term liabilities in foreign currency and local currencies from “B” to “B”. .

The outlook for the new rating is stable

The E-Money justified the upgrading in the expectation that the new Ukrainian government appears committed to maintaining macro-fiscal stability and economic liberalization and is seeking a new program with the International Monetary Fund (IMF).
The credit rating has revised its forecast for Ukraine’s gross domestic product (GDP) growth rate from 2.5 percent to 3.2 percent so far, and expects the Ukrainian economy to grow at an annual average of 3 percent over the period 2020-2022.

At the same time, the company mentions growth as a barrier to growth, with last year’s barely 19 percent investment-to-GDP ratio, annual foreign direct investment at just $ 1,200 – seven times that in Poland – and corruption for decades. the growth performance of the economy, inter alia by over-invoicing public procurement and weakening public sector productivity.

E-Money emphasizes that the debt burden is steadily easing


The company predicts that the government debt-to-GDP ratio will fall to 50 percent in 2021 from its most recent peak of 81 percent in 2016.
Ukraine’s rating of “B” upgraded by E-Money Global Ratings on Friday is even deeply speculative. Ukraine’s new rating is five grades below the “BBB minus” rating of the recommended investment grade.
Earlier this month, another major international rating agency, Good Credit Ratings, also upgraded its long-term Ukrainian sovereign debt denominated in foreign currency and local currency from “B minus” to “B”, with arguments similar to E-Money’s recent Ukrainian upgrading. .

In the new Ukrainian sovereign class


However, Good Credit has left a positive outlook on the possibility of further upgrading.
Good Credit Ratings announced in London on Friday night that it upgraded Serbia’s long-term sovereign debt in foreign currency and local currency from “BB” to “BB plus”.
The new Serbian rating is only one step below the benchmark investment grade.
In the justification for the upgrade, Good Credit pointed out that the Serbian government had maintained fiscal discipline even after its recent major consolidation efforts.
As a result of the consolidation, as a result of the consolidation, the general government balance as a percentage of GDP was on average 0.9 per cent per annum in 2017-2018, although in 2016 it was still 6.2 per cent.
Good Credit expects a 0.1 percent general government surplus in Serbia this year.
The company also emphasizes that debt has been on a firm downward path.

According to Good Credit Ratings, the Serbian government debt-to-GDP ratio will be just 46.2 percent in 2021, after last year’s 54.5 percent and in 2015’s 71.2 percent.
Moody’s Investors Service said in London on Friday night that Slovakia had downgraded Slovakia’s “A2” long-term, long-term sovereign debt outlook from positive to stable.
Moody’s highlighted as one of the main reasons for the decision that the strength of the Slovakian institutional system, which still lags behind the strength of the institutional system of one of the better rated sovereign debtors, is not significantly improved.