29.09.2012

The international credit rating agency Standard & Poor's published a review and forecast about the Bulgarian economy. "After 1.7% GDP growth in 2011, we expect the economy to grow by about 0.5% in 2012", states the agency backing its forecast with the continued weakness in domestic demand amid a decline in external demand in particular from the EU. "But as recovery in external demand trickles through the economy and spurs domestic demand, we believe that annual real GDP growth could reach 3% after 2013" the credit rating agency further points out.

S&P expects the government to overperform this year's budget deficit target of 1.6% of GDP and to cut the deficit further in the coming years. As a result, they expect general government debt will be around 17% of GDP in 2012 and decline thereafter and the net government debt will reach about 10% of GDP in 2012.

We remind that in August Standard & Poor's raised its short-term foreign and local currency sovereign credit ratings on Bulgaria to 'A-2' from 'A-3' and also affirmed their 'BBB' long-term foreign and local currency sovereign credit ratings with stable outlook. The rationale thereof is the Agency's view of the government's strong track record of appropriate fiscal policy and low gross debt, despite the severe recession and subsequent slow recovery; and the country's solid growth prospects in the medium term.

You can find the analysis of Standard & Poor's HERE.