S&P Global Ratings upgraded its long-term foreign- and local-currency sovereign credit ratings on Serbia to BB+ from BB, citing the country's robust exports and investment-driven economic expansion.
The rating agency noted a "remarkable departure" from Serbia's track record of weak growth thanks to a reduction in macroeconomic imbalances.
The Serbian economy grew 4.8% year over year in the third quarter as investments and private consumption helped buoy domestic demand.
The rating agency expects Serbia's GDP growth to reach 3.6% in 2019 and 3.9% in 2020, compared with 4.4% in 2018. Exports, which grew almost 11% in the third quarter, are forecast to rise 9.0% this year.
"We believe that solid domestic demand, including the benign investment outlook, should help the economy to weather ongoing weakness in Europe," the debt watcher said.
In upgrading Serbia, S&P Global Ratings also affirmed the country's B short-term foreign- and local-currency sovereign credit ratings, with a positive outlook.
The agency could raise Serbia's rating in the year ahead if foreign direct investments remain supportive of the country's export and GDP growth.
The outlook could be revised to stable from positive if a slowdown in the wider eurozone markedly weakened Serbia's growth momentum, among other factors.
This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.