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24th August 2021, Skopje – Standard & Poor’s Credit Rating Agency has confirmed North Macedonia’s credit rating at BB-, with a stable outlook. The stable outlook, as noted in the report on North Macedonia, published by S&P Global Ratings, reflects the expectation that our country’s projected economic recovery will help curb fiscal and external deficits over the coming year.

S&P also noted they could raise the ratings if continued structural reforms strengthened the sovereign’s institutional arrangements while preserving sustainable fiscal policies.

Our country’s EU accession aspirations could remain an anchor for such institutional improvements and structural reform progress.

– North Macedonia’s economy is recovering from the fallout of the pandemic We expect the economy will expand by 3.7% in 2021, despite a contraction in the first quarter. The robust recovery of foreign demand is driving growth, reflecting the specifics of North Macedonia’s integration in international supply chains, as well as private consumption, which benefits from recovering private transfers and government support measures that have cushioned disposable incomes, the report says.

A potential resurgence of the pandemic and accompanying restrictions remains a risk to the economic recovery, although, as S&P noted, “the country’s exports proved resilient to the imposed restrictions”.

As regards government debt, Standard&Poor’s estimate it will reach 58% of GDP by 2024.

At the same time, the organic budget law, currently in the legislative process, could help entrench prudent fiscal policies and strengthen the fiscal framework.

North Macedonia’s external leverage reflects contained current account deficits and the country’s success in attracting foreign investment, particularly in the export-oriented manufacturing sector. Such positive development is expected to continue over 2021-2024, as noted in S&P report.

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