International rating agency Moody’s Investor Service affirmed credit rating of Bosnia and Herzegovina, B3 with stable outlook.
Explaining the decision to affirm the rating and stable outlook, analysts of Moody’s mentioned the following key rating drivers: persisting structural challenges continue to weigh on Bosnia and Herzegovina’s medium-term growth prospects, constraining the country’s economic strength; moderate debt levels and fiscal restraint in recent years provide fiscal space to respond to economic shocks such as the Coronavirus pandemic; and weak institutions, in part reflecting a complex governance system and divisive political environment, continue to hamper effective policymaking.
The Moody’s analysts expect Bosnia and Herzegovina’s economy to be significantly impacted by the Coronavirus pandemic this year, due to the effect of the domestic measures to contain the spread of the Coronavirus, decline in trade and a reduction in workers’ remittances. Tourism has also been affected. In the report of this Agency, it is mentioned that Bosnia and Herzegovina’s real GDP projections are to contract by 5.5%, after 2.9% growth in 2019, while in 2021, the GDP growth projections will amount to 3.5% in 2021.
