02.12.2019

The international credit rating agency S&P Global Ratings raised its long-term and short-term foreign and local currency sovereign credit ratings on Bulgaria to “BBB/A-2” from “BBB-/A-3”. The outlook is positive.

The ratings were raised as a result of the resilient growth of Bulgaria's economy, without building macroeconomic imbalances. The country’s fiscal and external balance sheets are strong, and progress on entering the Exchange Rate Mechanism II (ERM II) is steadfast. The positive outlook of the ratings reflects the expectations of S&P Global Ratings’ analysts that Bulgaria's progressively strengthening fiscal and external position will continue as the country grows resiliently in a weaker external economy.

The rating agency thinks that the country has completed its own deliverables under its action plan toward ERM II and Banking Union membership, but S&P also points out that the ultimate accession decision is not fully in its control.  Institutional convergence has progressed. Legislative changes are made in the area of macro-prudential supervision and central bank powers. Improvements are made in the framework for insolvency, state-owned enterprise (SOE) management, non-banking financial supervision and anti-money-laundering.

The agency could raise the ratings if the economy continues to grow resiliently without reversing fiscal gains or if the country's external performance strengthened beyond the expectations of S&P Global Ratings. The ratings could also be raised if Bulgaria further entrenches structural and institutional improvements, for example on its path toward euro adoption. The credit rating agency could revise the outlook to stable if it observed external financing pressures or the buildup of significant macroeconomic imbalances.

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