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Moddy's assesses the Albanian economy with a stable perspective, the agency's findings

Politiko 2022-12-01 15:51:36

Moddy's assesses the Albanian economy with a stable perspective, the

Moddy's, the International Credibility Assessment Agency, has rated the Albanian economy with "B1 with a stable perspective".

According to the agency, Albania's economic recovery after the Covid-19 pandemic was strong and GDP reached pre-pandemic levels in 2021, Monitor reports . Government debt, which rose sharply to 74.5% of GDP in 2020, has declined for 2022.

Regarding the banking system and liquidity risks, Moddy's emphasizes that they will remain restrained. The agency forecasts a slowdown in GDP growth to 3.0% in 2022 and 1.8% in 2023.

The country's ability to support the process of per capita income convergence with EU countries, according to the agency, will depend on the government's success in implementing structural reforms and increasing competitiveness in relation to other countries in the region.

The agency evaluates the formal opening of the membership negotiations to the advantage of Albania, as an impetus that will influence the implementation of the reform and bring about the improvement of the general business environment.

Fiscal indicators have been on a gradual positive trend since the significant deterioration they experienced in 2013 due to spending overruns on the eve of the parliamentary elections in June of that year.

The impact of the pandemic has weighed on public finances, temporarily breaking this positive trend, while the risk of contingent liabilities remains high.

According to Moody's, Albania's main fiscal risks are related to weather-related electricity imports, contingent liabilities arising from the energy sector, from the resolution of property restitution claims stemming from the communist period, and from increased off-budget financing in the form of public private partnerships (PPP) that have been used as an instrument for increasing public investments.

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