S&P affirms Albania

S&P said it affirmed its B+/B long- and short-term sovereign credit ratings on the Republic of Albania. The outlook remains stable.

The stable outlook reflects the agency’s expectation that the government of Albania will maintain its commitment to fiscal consolidation, particularly on the revenues side, supported by steady economic growth and the authorities' increased capability to enforce tax compliance.

“Lower risks associated with the country's gradually declining debt-to-GDP ratio will also help to reduce the government's interest bill as a share of government revenues. At the same time, the country will continue to strengthen its institutions ahead of the EU accession process, and we expect its external financing position will not deteriorate,” S&P said in a news release.

The agency said the ratings on Albania reflect the country's steady progress toward fiscal consolidation, despite political tensions in mid-2017, aided by steady economic growth and reform progress.

“Overall, we note that Albania fiscally outperforms its peers in the same rating category. The current exchange rate regime is more stable than peers', and Albania has improved its institutional set-up,” S&P added in the release.

The agency expects that Albania, coming from a low base, will be able to generate solid economic growth rates of about 3.8% per year on average in real terms during 2017-2020.

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