8th May 2021, Skopje – Fitch Ratings has affirmed North Macedonia’s credit rating at ‘BB+’ with a negative outlook. As the Agency noted, North Macedonia’s ratings are supported by favourable governance, ease of doing business indicators, and a track record of coherent macroeconomic and fiscal policy that underpins the longstanding exchange rate peg to the euro.
The Agency forecasts growth to reach 3.9% in 2021 and 4.3% in 2022, with the growth outlook remaining dependent on the evolution of the pandemic in North Macedonia and key export markets.
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.
Credit rating agencies’ assessments influence the decision-making of the investors planning to invest in the region. Credit rating has a positive effect on the decision-making as regards investing in a particular country, further contributing to boosting the economic growth, strengthening the export, increasing the employment and higher wages.
In its report, the Agency noted that competitive labour costs, in spite of rising real wages, and good government policies aimed at attracting investment and progress in the negotiation towards EU accession could also favour foreign investment prospects.
Affirmed credit rating of the countries amid pandemic also contributes to reduction of government debt, thus creating interest savings.
As a result of the good economic policies, as well as the affirmed credit rating by the credit rating agencies, Eurobond was issued at historic low interest rate.
In its report, Fitch points out the stable foreign exchange reserves.
The negative outlook reflects continued downside risks to near-term growth and public finances from the coronavirus pandemic.