Fitch changes Serbia to positive

Fitch Ratings said it revised Serbia's outlook to positive from stable and affirmed its long-term foreign and local currency issuer default ratings at B+.

The issue ratings on Serbia's senior unsecured foreign and local currency bonds were also affirmed at B+. The country ceiling was affirmed at B+ and the short-term foreign currency issuer default rating at B.

The economy is slowly recovering from a recession in 2014, with Fitch revising its forecasts for 2015 and 2016 upwards. The economy is now expected to grow by 0.7% (previously 0%) in 2015 and 1.7% in 2016, driven by a pickup in investment and a recovery in mining and energy following the floods in May 2014. Consumer spending has proved resilient, supported by private sector wage growth and lower oil prices.

Despite the pickup, Fitch said, medium-term potential growth, estimated at 3%, remains below the average five-year B median growth of 4.6%.

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