"Big recognition for Belgrade": Capital's credit rating outlook upgraded to "positive"
The agency has upgraded the credit outlook of the City of Belgrade from "stable" to "positive", which is a great recognition for Belgrade, says Goran Vesic
Belgrade Deputy Mayor Goran Vesic says the rating agency Moody's has confirmed Belgrade's credit rating, at the same time upgrading the prospects of the City of Belgrade's credit rating to "positive".
"International credit agency Moody's has confirmed the credit rating of the City of Belgrade (BCA) Ba3, which is identical to the credit rating of the Republic of Serbia. The agency has improved the credit outlook of the City of Belgrade from 'stable' to 'positive'", which is a great recognition for Belgrade," Goran Vesic said.
The upgrade of the credit rating forecast is due not only to the city's stable finances and the responsible way of doing business, but also to the improvement of the business climate in Serbia, said the deputy mayor.
"Moody's believes that improved real outlook for the country's economic growth will also have a positive effect on the growth of the City of Belgrade's revenue. As a result of all these factors, Moody's expects Belgrade's fiscal performance to remain good, with a gross operating balance of 12 to 14 percent of operating income in 2019/2020," said Vesic, adding that the report of the international credit agency states that "the City of Belgrade's rating certificate reflects the city's solid and sound financial fundamentals, sound and balanced budget management, as evidenced by its high self-financing capacity and declining debt."
The agency estimated that "the City of Belgrade's rating, which is based on declining indebtedness and a direct debt burden of 44 percent of operating income at the end of 2018, limited borrowing demands and tight control over budget spending, will help stabilize direct and indirect net debt to about 50 percent of operating income over the next two years."
"In order to allow citizens to compare how it was before - Belgrade's direct and indirect debts amounted to 67 percent of operating income in 2016, while in 2014 it was a huge 101.2 percent of operating income - which best illustrates how former Mayor Djilas made Belgrade overly indebted," said Vesic.
Moody's also said that "the City of Belgrade has an important role in the national economy as the capital and most developed city in Serbia, with about 40 percent share in the country's GDP."
Goran Vesic also congratulated Novi Sad on obtaining the same credit rating and the same credit outlook as Belgrade.
"That's best proof that the policy of financial discipline is being implemented in all local governments and that Serbia is developing equally. Belgrade welcomes this. Well done to our colleagues in Novi Sad," Vesic said.