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S&P affirms Macedonia at BB-/B, outlook stable

Staff Writer |
Standard & Poor's said it affirmed Macedonia's long-term and short-term foreign and local currency sovereign credit ratings at BB-/B with a stable outlook.

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"The stable outlook reflects the balance between the risks from Macedonia's rising public debt and remaining political uncertainty over the next 12 months, and the country's favorable economic prospects," the credit agency said.

The political crisis in Macedonia has receded following the formation of a narrow majority coalition government in May 2017, the global credit agency said, adding that it expects a reasonable degree of policy continuity, which should support a gradual acceleration in economic growth in the near term.

"The ratings on Macedonia reflect our view of the country's relatively low income levels; comparatively weak checks and balances between state institutions, coupled with the still-fragile political environment; and limited monetary policy flexibility arising from the country's fixed-exchange-rate regime.

"The ratings are primarily supported by moderate - albeit rising -external and public debt levels.

"Institutional and Economic Profile: The formation of a coalition government should support a gradual acceleration in growth following output contraction in the first half of 2017."

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