Moody's confirmed BiH's credit rating

The international agency for assessing state (sovereign) credit rating, Moody's Investors Service, confirmed BiH's credit rating, B3 with stable outlook, reports the Patria News Agency.

In explaining the confirmation of the credit rating and the expected stable outlook, Moody's analysts assessed that the economic situation in BiH is a consequence of slow progress in achieving necessary structural reforms; consequently, the income level is significantly below the European Union average.

The complex political system in the country affects the efficiency of the government/public sector, analysts state. Bosnia and Herzegovina is a moderately indebted country, which contributes to its fiscal strength and allows it to count on further financial support from international financial institutions, despite limited access to external financing.

The stable outlook reflects the expectations of Moody's analysts that progress in implementing the government's reform agenda will enable the necessary financial and technical assistance from the International Monetary Fund (IMF), but that risks in implementation, especially those coming from the challenging political environment, could hinder reforms.

BiH's credit rating, according to the analysts of this agency, could improve if institutions are strengthened through the implementation of structural reforms and political circumstances improve, while a downgrade could occur if BiH fails to reach an agreement with the IMF and fails to implement reforms on the path to European integration.