JCR Eurasia affirms Albania as BB+ with stable outlook

TIRANA, March 25 – JCR Eurasia Rating, an international credit rating institution based in Turkey and affiliated to Japan Credit Rating Agency, has affirmed the sovereign ratings of Albania as ‘BB+’ on the long term scale and an affirmed short term sovereign rating of ‘B’. All ratings have been placed under an affirmed ‘Stable’ outlook.
“The Albanian economy in 2012 was rather troublesome. The source of economically important remittance inflows dropped and Albania’s strong economic and financial links to Greece and Italy remain a key risk to our outlook.”
As a result, while maintaining economic and financial balances, the Albanian economy recorded positive growth. However, the economic growth has slowed over the past several years. One of the main problems of the Albanian economy is the lack of final demand for goods and services due to higher uncertainty and tighter lending standards. The lack of demand is the main reason for the low economic growth, deterioration of credit quality and sluggish labor market. Despite the increase in the ratio of nonperforming loans, the banking sector seems stable in terms of its liquidity figures and profit.
For all these reason, JCR ER’s rating opinion remains unchanged. In addition, despite changing global balances, Albania has been successful in maintaining its risk positions. High public debt and the current account deficit are the most important factors influencing the Albania’s Sovereign Rating result.
Both Standard and Poor’s and Moody’s have kept Albania’s rating unchanged at B+ and B1.