Moody's Affirmed Credit Rating of Bosnia and Herzegovina

International agency for state (sovereign) credit rating Moody's Investors Service affirmed the credit rating of Bosnia and Herzegovina, B3 with Stable Outlook.

In the explanation of the affirmed credit rating and Stable Outlook, the analysts of the Moody's have estimated that the Bosnia and Herzegovina's economic situation reflects slow progress in addressing needed structural reforms; consequently, the income level is well below the European Union average.

The country's complex political system impacts the effectiveness of the governments/public sector, the analysts have stated. Bosnia and Herzegovina is a moderately indebted country, and that contributes to its fiscal strength and enables that, although access to external financing is limited, Bosnia and Herzegovina can rely on further financial support of international financial institutions.

The Stable Outlook reflects Moody's expectation that progress on implementing the government's Reform Agenda will make possible the needed financial and technical support of the International Monetary Fund (IMF), but that implementation risks, particularly those from the challenging political environment, might hinder further reforms.

The credit rating of Bosnia and Herzegovina, according to the opinion of the analysts of this agency, could be upgraded in case of strengthening of institutions through the implementation of structural reforms and in case of improvement of political circumstances, while the downgrade could happen in case that Bosnia and Herzegovina failed to reach an agreement with the IMF and failed to implement the reforms on its path to the European integrations.