Standard&Poor's Confirmed Credit Rating of Bosnia and Herzegovina

International rating agency Standard and Poor's confirmed the credit rating to Bosnia and Herzegovina, B with Stable Outlook.

In the explanation of this agency, it is mentioned that the rating factors have remained unchanged. Standard&Poor's thinks that the floods that happened this year could bring about a lower economic growth and deterioration of the country's foreign debt and fiscal position. However, it is expected that Bosnia and Herzegovina will continue to receive a significant international support to finance its deficit.

Stanadard&Poor's also mentions that the banking sector is well capitalized, and that NPLs (non-performing loans) are increasing slightly as a consequence of the floods and their impact on households and corporate sector.

Analysts of this agency say that the credit rating could be lowered if increased uncertainty in the foreign debt financing or failure in meeting the conditions of the International Monetary Fund were observed. The rating could be decreased by more than one degree if there were delays of repayments to official creditors.

Increase of credit rating could be considered in case of better cooperation between the Entities and improvement of their relations with state institutions, which would gradually enable reform implementation which would not rely on international pressure and policy conditionality. This would strengthen the business environment and pave the way for sustainable growth and better external position.