Moody’s upgrades Albania’s country rating to Ba3-stable
Photo: Moody’s Ratings
Albania’s economic outlook has received a positive boost, as the international credit rating agency Moody’s upgraded the country’s rating from B1-positive to Ba3-stable. This upgrade reflects Albania’s progress in implementing reforms, strengthening public finances, lowering debt levels and navigating global economic challenges. The Albanian Finance Minister, Petrit Malaj, welcomed this development, emphasizing its significance in building a stable, long-term economic foundation for the country.
Why is this important: For international investors, the credit rating improvement is a critical indicator of reduced risk in the economy, showing that the country is managing its debt responsibly. The Moody’s upgrade signifies enhanced financial stability, which should allow Albania to access international markets at lower borrowing costs. It reassures foreign investors that the country offers a more predictable and secure environment for business, reducing the perceived risks associated with investment. In the broader global market, the improved rating can differentiate Albania from neighboring countries, offering a competitive advantage.
Context: According to the Albanian Finance Minister, the Moody’s upgrade in the country’s rating from B1-positive to Ba3-stable comes on the heels of a notable improvement in economic indicators. Over the past decade, Albania’s GDP has more than doubled, rising from €9.6 billion in 2013 to an estimated €21.4 billion by the end of 2024. Additionally, per capita income has surged from €3,300 to an expected €10,380 during the same period. While the average GDP growth in the region was 53%, Albania achieved a growth rate of 80% during that time period.
Moreover, unemployment rates have reached a low recently, decreasing from 16% in 2013 to 10.7% in 2023. In contrast, the regional average stands at 12.4%. Alongside this, inflation has been managed effectively, averaging 2.5% compared to 3% regionally. Additionally, Albania has successfully reduced its public debt by over 14% over the last decade, a notable achievement according to Mr. Malaj, considering the significant crises faced, such as the 2019 earthquake and the COVID-19 pandemic. With public debt projected to drop from 70.4% of GDP in 2014 to 56.3% by the end of 2024, Albania has managed to navigate its economic challenges effectively, contrasting sharply with an average debt increase of 9% in the region.
What was said: According to Mr. Malaj, this positive assessment confirms above all that Albania is on the right path in terms of reforms related to integration, ensuring good governance, and further strengthening public finances. On top of increasing confidence among foreign investors, the upgrade will allow Albania to secure lower financing costs from borrowing in the international markets.
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