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Country Risk Service Albania 1st Quarter

  • ID: 2755047
  • Country Profile
  • Region: Albania
  • 22 Pages
  • The Economist Intelligence Unit
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The sovereign risk rating remains at B and the score is unchanged, at 51. The public debt/GDP ratio is high, at an estimated 70.5% in 2018, and remains the main constraint on the rating. The Economist Intelligence Unit expects the government to remain committed to cautious fiscal consolidation, narrowing the budget deficit from an estimated 2% of GDP in 2018 to 1.5% in 2020. We consider the B rating to be stable, but if the government continues to make strong progress with its policy agenda, this could prompt a rating upgrade to BB.

The currency risk rating is unchanged, at BB, and the score remains at 48. We expect the lek-supported by relatively high local-currency interest rates, and resilient growth of exports of goods and services-to strengthen modestly on average against the US dollar (while weakening slightly against the euro) in the 2019-20 forecast period. The outlook for the rating remains stable.

The banking sector risk rating is unchanged, at B, and the score remains at 55. We expect that the Bank of Albania (BoA, the central bank) will begin to raise the repurchase (repo) rate in the second quarter of 2019, from the current record low of 1%. Banks are well capitalised and liquid, but the share of non-performing loans, at 13% as at end-November 2018, remains high.
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Country Risk Service Albania 1st Quarter

Risk assessment
Sovereign risk
Currency risk
Banking sector risk
Political risk
Economic structure risk

Definitions
Sovereign risk
Currency risk
Banking sector risk
Political risk
Economic structure risk
Overall country risk

Sovereign risk
Current assessment
Rating outlook

Central scenario for 2019-20: Political stability

Central scenario for 2019-20: Election watch

Central scenario for 2019-20: International relations

Central scenario for 2019-20: Policy trends

Central scenario for 2019-20: Fiscal policy

Central scenario for 2019-20: Monetary policy

Central scenario for 2019-20: Economic growth

Central scenario for 2019-20: Inflation

Central scenario for 2019-20: Exchange rates

Central scenario for 2019-20: External sector

Key risk indicators

Ratings summary

Quarterly indicators

International assumptions summary

Economic structure

Public finances

Exchange rates, interest rates and prices

Financial sector

Current account

International liquidity

Foreign payment and liquidity indicators

External trade

External financing requirement

External debt stock

External debt service
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