Albania’s sovereign credit rating upgraded by major int’l agency
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- The agency has assessed that Albania has consistently demonstrated its ability to withstand shocks.
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TIRANA, March 26, 2024 – The Standard & Poor’s (S&P) credit rating agency, one of the three largest in the world, has upgraded Albania’s long-term sovereign credit rating by one notch, pushing it for the first time into ‘BB-‘ from ‘B+’.
“The rating strengthens Albania’s external positions and brings tangible benefits to the country’s economy,” said Finance Minister Ervin Mete, explaining that “now the country will be perceived more positively by foreign investors to invest in Albania, which is expected to translate into higher foreign investments, as well as easier conditions for Albania’s borrowing in international markets. This improvement is also expected to be reflected in the domestic market, with lower financing costs for banks, businesses, and individuals.”
The agency has assessed that Albania has consistently demonstrated its ability to withstand shocks, including the 2019 earthquake, the COVID-19 pandemic, and the macroeconomic effects of the Russia-Ukraine war, highlighting the sustainable growth of the economy in the past three years and the improvement of public finance parameters.
According to the agency, the economic resilience of the country is partly attributed to the resilience of tourism, which “helped Albania increase service exports by nearly 15% of GDP between 2019 and 2023, significantly strengthening its external position.”
S&P has assessed the decline in public debt, from 74.5% of GDP in 2020 to 59.2% in 2023, according to Albanian authorities, predicting that “the authorities will aim to maintain this mature approach to public finances, in line with the Organic Budget Law, ensuring that Albania’s public debt remains sustainable at an average of around 55% of GDP during the years 2024–2027.”
The Albanian Minister of Finance added in his statement that “this S&P rating comes six months after the international agency revised Albania’s outlook from stable to positive,” adding that “macroeconomic indicators have significantly improved, unemployment is at historic lows, inflation has returned to target ahead of expectations, the external position has improved thanks to the very good performance of the tourism sector, and foreign direct investments have reached their highest historical levels.”
