Credit rating agency Fitch Ratings has upgraded the Republic of Serbia long- and short-term foreign and local currency sovereign credit ratings to level BB from BB-. The outlooks are stable.

The affirmation of the Republic of Serbia credit rating by Fitch Ratings reflects the view that the government of the Republic of Serbia will continue with the implementation of fiscal consolidation and structural reforms in 2018-2019, which contributed to the lower fiscal deficit.

Public debt sustainability is improving. After a large decline to 63.6% of GDP in 2017, Fitch expects a gradual decline in government debt to 62.1% of GDP in 2018 and 60.6% of GDP in 2019.

The main drivers of positive trend are further fiscal consolidation resulting in a reduction in the general government debt to GDP, continued reduction in net external debt and stable FDI inflow. This rating agency also assumes that the continued opening of chapters in EU accession talks and the successful completion of the standby arrangement and the further cooperation with IMF will remain important factors .

Fitch expects the current account deficit to remain around at an average level of 4.3% of GDP over the period 2017-2019 and to be fully covered by robust FDI inflows.