The international debt quality analysis service, Standard & Poor's, estimates that the Albanian economy is healthy enough to repay the loans it takes out, writes A2 CNN. For the second time in a year, the agency that helps investors understand the ability of a country, company or institution to repay its debts has increased its rating for Albania to "BB-" from "B+" that it was.
Looking ahead, we project that the Albanian economy will expand by an average of about 3.5% per year over the period 2024–2027. However, this forecast remains sensitive to downside risks, particularly those related to the labor market and the possibility of prolonged economic weakness in Europe.
Standard & Poor's
According to Standard & Poor's grading methodology, which starts with a "CG" rating, close to bankruptcy, and ends with a "AAA" rating, equivalent to "excellent," Albania ranks near the middle of the pyramid. The country's economy is defined as having "limited solvency."
However, Albania's assessment remains constrained by a relatively weak institutional framework, limited monetary policy options, and moderate external financing needs. Over 50% of government debt is in foreign currency or short-term. Furthermore, the economy is heavily euro-denominated and highly informal.
Standard & Poor's
But the picture that Standard & Poor's paints of the Albanian economy is not all in color. At a time when the government is using it as a "warhorse" for the May 11 elections, the agency warns that the "European dream" may remain on the shelf even beyond 2030.
Without a significant effort to accelerate the pace of reforms, we consider it unlikely that Albania will be eligible for EU membership before 2030.
Standard & Poor's
On March 23, 2024, the international debt quality analysis service upgraded Albania's long-term sovereign credit rating to 'BB-' from 'B+' for the first time, highlighting the country's improvement in its fiscal and external position. (A2 Televizion)
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