International credit rating agency Standard & Poor’s (S&P) has upgraded Albania’s credit rating from "BB-" to "BB", accompanied by a stable outlook. This positive shift reflects Albania’s strengthening economic and fiscal performance over recent years, positioning the country more favorably to attract foreign investments, Albanian state agency AIDA reports.
Economic Strength and Debt Reduction
A key factor behind the upgrade is the significant reduction in public debt. Since 2019, Albania has lowered its public debt by 10 percentage points of GDP. Additionally, the current account deficit has more than halved, while net inflows of foreign direct investment (FDI) have increased, supporting sustainable economic growth.
Booming Service Exports and Tourism Growth
One of the main drivers of this economic improvement is the surge in service exports, which have doubled in value since 2019. This growth is largely fueled by Albania’s booming tourism sector, now a key pillar of the country’s economy.
S&P projects Albania’s economy to maintain a growth rate exceeding 3% annually between 2025 and 2028, driven by investment flows and domestic consumption.
Fiscal Discipline and Reforms
On the fiscal front, Albania’s public finances have shown resilience. S&P highlights the Albanian government’s efforts in passing crucial legislative reforms, strengthening progressive taxation, and improving tax compliance. These measures, paired with ongoing fiscal consolidation efforts, are expected to keep budget deficits moderate, averaging around 2% of GDP through 2028.
This upgrade not only boosts Albania’s financial credibility but also enhances its appeal to international investors, marking a significant milestone in the country’s economic progress.