Moody's alters Albania view to positive

Moody's Ratings said it changed the outlook on the government of Albania to positive from stable and affirmed the B1 long-term foreign- and local-currency issuer ratings as well as the B1 foreign-currency senior unsecured debt ratings.

“Moody's decision to change the outlook to positive reflects the possibility of a better than anticipated scenario for fiscal and debt metrics based on fiscal consolidation supported by the implementation of fiscal reforms. Positive rating momentum could also stem from higher trend growth of GDP and per-capita income than currently expected by Moody's. The implementation of further institutional reforms in the context of the E.U. accession process adds to upward pressure on the rating,” the agency said in a press release.

Moody’s noted the positive effect of the declining debt burden on fiscal strength is softened by the weakening of debt affordability metrics.

“The deterioration of debt affordability is more limited than we had expected at the time of the last rating action in April 2023. Moody's expects the debt-to-GDP ratio to decrease to 56.3% in 2024 from 59.2% in 2023 and interest payments to revenue to show a gradual weakening to 8.8% in 2024 from 7.4% in 2023. Beyond this year, Moody's expects the debt-to-GDP ratio to remain on a sustained downward path falling to below 50% in 2030 being driven by small primary surpluses and solid nominal GDP growth,” Moody’s said.

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