Standard & Poor’s has affirmed North Macedonia’s credit rating at BB- with a stable outlook, the Ministry of Finance said in a press release Saturday. The global ratings agency expects the Macedonian economy this year to get back on the track of economic growth and to overcome the blow of the crisis caused by the COVID-19 pandemic.
The agency also pinpoints the government’s efforts to strengthen the public finances system, including the new law on budgets, which envisages major reform in terms of budgetary planning and implementation control, the press release read.
“Maintaining the credit rating in continuity despite the effects of the coronavirus crisis is of immense importance, because it is a positive signal for investors about the policies implemented in the country,” it added.
After a sharp fall in the second quarter of 2020, the economy gradually rebounded by the end of the year, said the agency, noting that industrial production in December 2020 recorded a positive result for the first time since the onset of the crisis in February 2020.
According to the agency, the driving force behind growth in 2021 will be the recovery of export activity, as well as public and private consumption. According to its forecast, growth will stand at 3.6% this year.North Macedonia, said Standards & Poor’s, is integrated into the global supply chains, mainly in the automotive industry. With the automotive industry rebounding, as well as the economies of the country’s top trade partners, such as Germany, the Macedonian economy will rebound as well.
As regards the budgetary deficit, Standards & Poor’s forecasts that in 2021 it will be down to 4.9% and will continue to drop each year according to the government projections. They also note the commitment of the government to strengthen the fiscal framework, mentioning the law on budget, which envisages fiscal rules and the establishment of a Fiscal Council, said the Ministry of Finance.