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BELGRADE (Serbia), March 5 (SeeNews) - Reforms have helped enhance Serbia's economic growth prospects, but the country's competitiveness remains relatively weak, Moody's said.
The credit profile of Serbia, which has an issuer rating of "Ba3", is constrained by the country's "Low (+)" economic strength reflecting the economy's small size and relatively weak competitiveness scores, the rating agency said on Monday in an announcement of a periodic review of issuers including Serbia.
Serbia's "Moderate (-)" institutional strength is reflecting the gradual harmonisation of its laws and regulatory practices with EU standards as part of the country's accession process, while its "Low (+)" fiscal strength is driven by the relatively high debt burden, although gradually converging with the Ba-rated peer median on the back of fiscal consolidation efforts, Moody's said.
The "Moderate (-)" susceptibility to event risk of Serbia is attributed to risks posed by the banking sector, which is burdened by a somewhat elevated, albeit declining, share of loans which are non-performing and the high degree of euroisation.
“The review did not involve a rating committee, and this publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future," Moody's noted.
The European Commission started negotiations with Serbia on the country's accession to the bloc in January 2014. Serbia has opened 16 chapters of the EU body of law in the accession process thus far, and has closed two - Science and Research, and Education and Culture.