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For the first time since 2016, the Standard & Poor's agency has upgraded Albania's outlook. According to the agency's report, our country is confirmed to have a stable positive outlook, receiving a rating of "B+."
The "positive outlook" by the agency reflects its view that the fiscal parameters of the country will continue to improve beyond the agency's expectations through the government's efforts to consolidate public finances. Furthermore, despite a slowdown in the country's main trading partner, the EU, the agency anticipates that Albania's external position parameters may improve more than expected as the global economy rebounds and the Albanian tourism sector continues to expand.
The agency predicts that after a growth moderation for this year at 3%, mainly due to lower foreign demand from Europe, growth is expected to regain momentum after the current year 2023, supported by easier financial conditions and the recovery of global economic activity.
According to the agency, in recent years, Albania has faced a series of setbacks, including an earthquake in 2019.
"Nevertheless, the government has made strong efforts to consolidate public finances. As a result, the agency expects the budget deficit to converge to around 2% of GDP by 2026, and public debt to reduce to 58.3% in 2026 from 64.5% reported in 2022, in line with the fiscal balance and public debt reduction rules set out in the Organic Budget Law (OBL). However, the agency notes that fiscal consolidation will also depend on sustainable economic growth and the continuity of structural reforms."
The agency observes that inflation has fallen, reaching 4% in August, significantly down from the 7.2% reported in January, and it anticipates that inflation will average 4.7% for the year 2023, gradually decreasing to the targeted level of 3% due to the strengthening of the Albanian lek.