At its January meeting, the OECD Consensus member countries decided on a new classification of two countries. Bulgaria and Albania moved up one level in the country risk ranking. Bulgaria has been helped by its imminent entry into the euro area and economic growth, Albania by reform efforts related to the country’s potential EU accession. For export credit agencies, these countries thus represent a lower level of risk as of 31 January 2025.
“Country risk classification is an important factor in exporters’ trade decisions. With the decrease in the risk rating of Bulgaria and Albania, new opportunities open up for Slovak companies to expand, which can take advantage of more favourable financing and insurance conditions, and Eximbanka is ready to provide comprehensive support in eliminating the risks associated with their penetration of these markets,” said Pavol Tavač, Deputy CEO of Eximbanka.
Bulgaria (upgrading from category 3 to category 2)
At the beginning of 2025, after several years of paralysis, the political situation in the country calmed down with the formation of a new coalition government. The country joined the Schengen area on 1 January 2025, which will boost the competitiveness of its economy. Bulgaria aims to adopt the euro from 1 January 2026, which would significantly eliminate exchange rate risks for investments and would also facilitate trade with its economic partners. The improvement in Bulgaria’s credit ratings is linked not only to its imminent entry into the euro area, but also to the growth of the economy, with real GDP growth projected to average slightly below 3% over 2025-2027, supported mainly by an expansion in domestic demand. Eurozone entry will have a positive impact on reducing domestic poverty while keeping Bulgaria on its convergence path towards the European Union average income. Bulgaria has one of the strongest fiscal records in Central and Eastern Europe. The fiscal deficit is estimated at less than 3% of GDP over the next three years, which will also keep debt net of liquid government assets at around 20% of GDP by 2027.
Albania (upgrade from category 5 to category 4)
Albania’s economy is not very diversified, highly dependent on agriculture, which accounts for around 20% of GDP. The country lacks modern infrastructure, still has a weak institutional framework, limited monetary policy flexibility and moderate external financing needs. However, Albania is steadily improving its government and external balance sheet. This includes significant improvements in value added tax collection. Despite the economic slowdown, public debt is on a stable trajectory and is projected to be sustainable at 60%. Albania’s banking sector is healthy, liquid, profitable and adequately capitalised, but still holds a significant portion of domestic government debt – around 26% of total banking sector assets. The domestic political situation is stable, and integration into the European Union (the start of negotiations on the country’s EU membership) is also viewed positively. The Albanian currency is stable, reaching an all-time high against the euro, mainly due to the long-term improvement of the Albanian balance of payments, with tourism and the related FDI inflows playing a major role. Albania also has a large capacity of young and cheap labour, which is linked to the inflow of remittances into the country from abroad.
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