S&P maintains North Macedonia’s credit rating at BB-/B, outlook remains stable

S&P Global Ratings has left North Macedonia’s long-term and short-term sovereign ratings unchanged at “BB-/B”, while also maintaining a stable outlook, the agency announced.

According to its assessment, the economic outlook, moderate levels of public debt and affordable debt-servicing costs largely offset the risks arising from high budget deficits.

The agency forecasts that major infrastructure projects and resilient consumption will support economic growth of around 3.6 percent in 2026 and 2027, despite the potential economic impacts of the war in the Middle East.

Increased public investment is expected to boost economic activity, but will also add around 5 percent of GDP to the government’s net debt in 2026, S&P estimates.

Nevertheless, the agency expects the budget deficit to continue narrowing gradually through 2029.

S&P warns that the rating could be downgraded in the event of a significant deterioration in fiscal or external indicators. Such a scenario could occur if a decline in foreign-exchange reserves puts pressure on the denar’s stability against the euro, or if repeated budgetary deviations trigger a rapid increase in debt.

An improvement in the credit rating, on the other hand, could be achieved through the long-term strengthening of institutions, the implementation of reforms that promote economic growth, progress in the European Union accession process or a sustained reduction in net public debt, accompanied by stronger economic growth.