02.12.2017

S&P Global Ratings has raised its long- and short-term foreign and local currency sovereign credit ratings on Bulgaria to 'BBB-/A-3' from 'BB+/B'.

The upgrade reflects Bulgaria's improving external metrics, underpinned by a multiyear expansion of exports, amid a rise in domestic savings. According to S&P Global Ratings, the risk of material and abrupt shifts in external financing flows, particularly in foreign direct investment (FDI), have reduced significantly. Public financial management is estimated as prudent as well, thus defending the currency board regime.

The stable outlook reflects balanced risks to the ratings on Bulgaria, with improving growth prospects, and a track record of conservative fiscal policy.

S&P’s might take a positive rating action over the next 24 months in case of strengthening economic recovery, further reductions in the Bulgarian banking sector's nonperforming loans, more substantial fiscal buffers and further bolster the credibility of Bulgaria's monetary framework through the Exchange Rate Mechanism (ERM) II. The factors that could lead to a negative rating action include re-emergence of external imbalances, growth falter, or fiscal performance deteriorate.

You can find the full text of the press release of S&P Global Ratings here.