Standard & Poor's raises Albania's rating to "BB"

Standard & Poor's (S&P) Ratings Agency announced that it has raised Albania's long-term foreign and local currency sovereign credit rating to 'BB' from 'BB-', with a stable outlook.

This decision reflected the country's strong economic and fiscal performance over recent years, the agency said.

S&P affirmed Albania's short-term foreign and local currency sovereign credit rating at "B", while revising the transfer and convertibility (T&C) rating to "BBB-" from "BB+", according to the agency's statement.

“High net foreign direct investment (FDI), remittances and rapid growth in services exports support Albania’s stable economic outlook, despite high geopolitical tensions and uncertainties ahead of this year’s parliamentary elections,” the global rating agency stated.

S&P forecasts that Albania's real GDP growth will remain above 3% through 2028, driven by investment and consumption.

The agency said that structural challenges persist, such as a shrinking workforce and continued emigration, while the country's dependence on tourism and external demand from key EU markets adds to economic vulnerability.

Fiscal risks also remain present due to the high level of foreign currency debt, short-term domestic debt maturities and significant public-private partnership commitments. Meanwhile, diplomatic tensions with Greece could pose challenges to Albania's progress in the European Union integration process, the global rating agency stressed.

This is the second upward revision in a year. On March 23, 2024, S&P upgraded Albania's long-term sovereign credit rating for the first time to 'BB-' from 'B+', highlighting the country's improving fiscal and external position.