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debt will drop to 62.2% of GDP,from 64% of GDP in 2019, and will decline further below 60% of GDP in 2021. However, the European Commission said that although Albania’s debt ratio is set to remain on a declining path, it is projected to remain relatively high, at around 62% of GDP in 2021.
In August 2019, Moody's Investors Service affirmed its B1 long-term foreign and local currency issuer ratings. S&P rates Albania at B+/B'.
The last time Albania issued a Eurobond was in October 2018. The seven-year Eurobond worth €500mn will be used to repurchase €200mn of the outstanding €450mn Eurobond due in 2020 and to cover the budget deficit.
4.2 Debt - Bosnia & Herzegovina
Bosnia & Herzegovina’s two autonomous entities — the Muslim-Croat Federation and Republika Srpska — chose to issue T-bonds in 2019 to fund their deficits, placing them on local markets.
In its 2019-2021 strategy for debt management, the Federation has estimated that it will need external funding equal to $1.06bn for the three years. Considering the costs and risks, the entity has decided to continue with its policy of trying to borrow mainly from multilateral financial institutions, estimating that they could provide 62.2% of all necessary funds.
The entity has assessed that the local market for state securities is underdeveloped, but has a growth trend. Local commercial banks are the main investors in state securities.
Republika Srpska has also drafted a 2019-2021 debt management strategy, setting the focus on issuing longer-term securities. Its strategy is to diversify its sources of financing, instruments and investors. The share of external financing should decrease in favour of internal funding.
4.3 Debt - Bulgaria
Bulgaria’s public debt is traditionally low at around 20% of GDP. According to Moody’s, the low level partly offsets the negative effect of the high share of foreign-currency debt (75%), almost entirely denominated in euros.
The rating agency expects that continued fiscal prudence and positive economic growth will allow public debt to continue its downward trend and reach 19% of GDP in 2020. It has also noted that Bulgaria's debt affordability as measured by interest payments to general government revenues improved to 1.8% of GDP in 2018 against 2.5% of GDP in
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