Moody’s warns Albania

Moody warns that the assessment of the Albanian debt is conditioned by the huge fiscal challenges, the increasing public debt and strong economic plunge which is expected to continue for the years to come.

This is the most negative report so far by Moody, and it’s nature is not for official evaluation purposes, but oriented to the market.

“Moody’s noted that Albania’s debt challenges were mostly seen in the significant deterioration of the government finances during the past year, causing a higher debt than in the neighboring countries which are equally evaluated to Albania with the B1 grade, meaning a low credibility level.

According to Moody, Albania’s public debt challenges become even harder due to the feeble financing structure, the short maturation term, the close basis of those who invest in government bonds, and also the high exposure of the banking system and the government itself to foreign currencies. One of the strongest points of the finance is Albania’s resistance to the world’s debt crisis, due to the fiscal and monetary stimulus. The agency also says that our country could benefit from the candidate status in December and the Trans Adriatic Pipeline construction. Moody values the government’s debt to B1, saying that it balances the expectancies for the candidate status with the hihgest public debt and the vulnerabilities of the internal financial market.

According to the company, even this evaluation is at risk, if the government fails to stop the fiscal deterioration in a short term. This could be a negative signal for investors and institutions that credited the Albanian government. They might hesitate to give other loans, due to the high risk.

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