S&P affirms North Macedonia’s ‘BB-/B’ rating with stable outlook

Standard & Poor’s Credit Rating Agency affirmed North Macedonia’s ‘BB-/B’ sovereign credit rating, with a stable outlook.

In its latest report, the S&P Agency assesses that the growth outlook, moderate government debt levels, and manageable debt-servicing costs broadly cushion against risks associated with high fiscal deficits, CE Report informs via the Ministry of Finance of North Macedonia’s official website.

The Agency forecasts economic growth of about 3.6% in 2026 and 2027, driven by continued high public investment and strong domestic demand, despite negative economic spillover from the war in the Middle East, mainly in the form of higher energy prices.

According to S&P, accelerated progress on critical infrastructure projects, notably the construction of Corridors VIII and Xd, contributed to an investment surge of over 9% in the first half of 2026 and remains a key driver of economic growth. A similarly high level of investment activity is anticipated throughout the second half of 2026 as well.

As per the Agency, resilient private consumption, fueled by a strengthening labor market with growing employment, rising wages, increasing pensions, and rising disposable incomes, is expected to further support growth.

Standard & Poor’s expects momentum in infrastructure investment to be sustained beyond 2027, supporting average economic growth of about 3.3% over the 2027-2029 period.

In the area of public finances, Standard & Poor’s expects gradual fiscal consolidation over the 2027-2029 period, with the budget deficit averaging approximately 3.4% of GDP.

Standard & Poor’s forecasts that net government debt will increase moderately to about 57% of GDP by 2029, reflecting continued high public investment, financing needs related to major infrastructure projects, and rising debt within state-owned enterprises.

At the same time, Standard & Poor’s expects debt-servicing costs to remain sustainable.

The Report notes that the issuance of two EUR 500 million Eurobonds in January 2026 (the largest to date) underscores the Government's resilient access to international capital markets to cover its remaining funding needs.

Standard & Poor’s notes that a lasting improvement in fiscal performance, demonstrated by a sustained reduction in net general government debt and stronger economic growth, could support an upgrade of the country’s sovereign credit rating.

As per S&P, the Government’s commitment to the EU accession process remains a vital driver of structural reforms over the medium term.

Standard & Poor’s reviews North Macedonia’s sovereign credit rating twice a year. The sovereign credit rating serves as a key benchmark for investors and international financial markets in evaluating a country's creditworthiness.

Photo Ministry of Finance of North Macedonia