Serbia and Bulgaria are the only two of six Eastern European countries to receive positive projections for 2025 from the credit rating agency Fitch.
Bulgaria’s favourable outlook (rating: BBB) is attributed to progress in adopting the euro, while Serbia (rating: BB+) benefitted from factors such as debt reduction, robust investment growth prospects, and improvements in external indicators, the agency reported. Serbia, which hopes to achieve investment-grade status from Fitch, is set to receive its next credit rating review in February.
“Fitch expects credit conditions for Eastern European countries to be ‘neutral’ in 2025, reflecting improved growth prospects, partly supported by recovery among key trading partners and stronger domestic demand. However, the region faces risks, including heightened trade tensions, geopolitical uncertainty, and limited fiscal buffers,” said Erich Arispe Morales, head of Fitch’s Eastern Europe Sovereign Ratings.
Hungary alone faces a negative outlook
Hungary is the only country in the region with a negative outlook (rating: BBB), due to concerns over policy credibility and public finances, according to the agency. Ukraine’s rating remains at RD (Restricted Default), with no forecast provided by Fitch.
Mixed regional outlook
The improved growth outlook for Eastern European countries is tempered by weaker public finances and high geopolitical risks, resulting in a “neutral” credit stance through 2025, Fitch Ratings stated in its report.
Political or geopolitical events disrupting fiscal consolidation in Central and Eastern Europe (CEE) or exacerbating external vulnerabilities and policy weaknesses in the Caucasus and Central Asia (CCA) pose risks to the region’s outlook, according to Fitch.
Growth and risks
Stronger growth among major trading partners is expected to support exports from CEE countries, while governments aim for gradual fiscal consolidation. Nonetheless, growth risks remain significant, stemming from potential trade tensions and global economic uncertainty.
Fitch predicts that CEE states will pursue fiscal consolidation, but deficits and public debt are likely to remain well above pre-COVID-19 levels.
Global geopolitical dynamics
Fitch also highlighted the potential impact of global political developments, including the economic and foreign policy agenda of a prospective Trump administration, which could involve a negotiated ceasefire between Russia and Ukraine. These developments may influence regional growth, financial and commodity markets, and geopolitical stability.
Meanwhile, escalation in the Middle East conflict and rising tensions between the US and China are expected to sustain elevated geopolitical risks, with implications for global growth and commodity prices, Fitch noted in its report.
(Nova Ekonomija, 04.12.2024)
Srbija je jedna od dve zemlje u regionu koja je dobila pozitivne prognoze od Fitch-a za 2025.
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Publish date : 2024-12-05 02:02:00
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