Standard&Poor's - Credit Ratings On Bosnia And Herzegovina Affirmed

On September 27, 2013, international rating agency Standard&Poor's has affirmed sovereign credit rating on Bosnia and Herzegovina at „B with Stable Outlook".

The Standard&Poor's analysts believe that the IMF Stand-By Arrangement from September 2012 has provided stability for Bosnia and Herzegovina. According to their expectations, lower-than-anticipated economic growth, pre-election spending, and excessive spending of the lower levels of government could represent risks in achieving the planned fiscal targets. Therefore, the conditions from the IMF Stand-by Arrangement should be motivating for continuation of financial consolidation, they should help stabilize public finance, and increase the ability to meet the increasing liabilities related to external debt repayment.

The analysts of the agency are expecting the budget deficit to be around 1%, and the general government debt stock in 2013 is expected to reach its maximum of 39% of GDP, after which it should decline to 36% of GDP by 2016.

According to the Standard&Poors's analysts, the ratings could be endangered in case of significant deterioration of Bosnia and Herzegovina's external position, or in the case of failure to meet the conditions from the IMF Stand-by Arrangement.

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