Stronger public finances and the implementation of reforms aimed at accelerating accession to the European Union have led the US agency Moody’s to upgrade Albania’s credit rating from “B1-positive” to “Ba3-stable”.
Moody’s has positively assessed the reduction in public debt, which is expected to fall to 54.3% of GDP by 2025 and below 50% by 2029. The agency also highlighted the importance of foreign direct investment in the tourism and energy sectors and the significant impact of the new EU growth plan on economic activity. All this should help further improve Albania’s economic prospects.
Moody’s forecasts Albania’s real gross domestic product (GDP) growth at 3.4% over the period 2024-2028, supported by EU funding for reforms, foreign direct investment in the tourism and energy sectors, and measures to increase productivity.
According to the agency, there are also some risks for Albania’s economy, such as the rapid and substantial depreciation of the exchange rate, a further increase in geopolitical risks and negative demographic trends.
Furthermore, the dependence of the energy system on hydroelectric sources could hinder economic growth and lead to increase electricity imports in periods of severe drought, with negative effects on the stability of the state budget. However, energy reforms aimed at further diversifying the energy mix and reducing energy losses could help reduce these risks in the medium term.
Moody’s decision was welcomed by Finance Minister Petrit Malaj. “Our economy will remain stable, even in the medium term,” he said. According to Malaj, the rating improvement will increase the confidence of foreign investors and help Albania enter international markets, promoting sustainable economic growth.
“Moody’s rating reflects the progress of our economy,” commented Prime Minister Edi Rama, highlighting “the strengthening of public finances and greater efficiency in the implementation of reforms” for European integration by 2030.
