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19th February 2022, Skopje – Standard & Poor’s Credit Rating Agency has affirmed North Macedonia’s credit rating at BB-, with a stable outlook. The stable outlook reflects the view that our country’s strong economic growth prospects will support the Government’s budgetary consolidation efforts, and allow it to broadly stabilize government debt in the medium term. North Macedonia’s credit rating at BB-, with a stable outlook, has been continuously affirmed since 2013. What is important is that in the course of 2020 and 2021, when the country faced the effects from the health and the economic pandemic-induces crisis, the credit rating has not changed.

S&P also noted they could raise the ratings if structural reform efforts continue, strengthening North Macedonia’s institutional framework, and allowing the country to consolidate its budgetary position.

The country’s EU accession objective could continue serving as a force for bolstering the institutional framework, while the new governments in both North Macedonia and Bulgaria have injected impetus into EU accession talks.

According to Standard&Poor’s, North Macedonia’s economy has recovered its pre-pandemic level. Buoyant private consumption on accommodative monetary policy, wage growth and a steady inflow of worker remittances, as well as investments, will remain the key growth factor.

As indicated by the Growth Acceleration Plan, raising investment is one of the Government’s key policy priorities, focusing on a variety of sectors, including education, transport, energy, road and health care infrastructure. Notable projects include Corridor VIII and North Macedonia–Greece Interconnector Gas Pipeline.

Despite the pandemic-induced contraction, exports have recovered solidly, thanks to strong external demand, especially from key trading partners in the EU.

S&P pointed out that a gradual economic recovery and government support measures helped the unemployment rate narrow to 15.7% in Q3 2021 from 16.5% in the same period a year earlier.

As regards net general government debt, S&P expect it to stabilize at 56%-57% of GDP in the medium term. They estimate the budget deficit amounted to 5.5% of GDP in 2021, lower than the 6.5% deficit projected in the 2021 Budget. This was due to higher nominal GDP growth, as well as solid revenue performance.

Credit rating of a country gives insight into the level of risk associated with investing in a particular country and it is one of the key indicators the potential investors consider when making decisions.

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