12.06.2015

The credit rating agency Standard&Poor's affirmed its 'BB+/B' long- and short-term foreign and local currency sovereign credit ratings on Bulgaria; the outlook is stable. The ratings are supported by the low general government debt but are constrained by the relatively low levels of income per capita, the weak governance and the worsening demographics. Standard&Poor's projects a gradual improvement of the fiscal position in the medium term. 

The agency acknowledges the efforts made to strengthen bank supervision and the initiated process of adopting the EU Bank Recovery and Resolution Directive which prescribes rules on dealing with the failure of banks while minimizing the burden on taxpayers. The rating agency sees the large share of Greek banks in the assets of the banking sector as a risk factor for our country.

Standard&Poor's also points out the conditions whereunder it could upgrade Bulgaria's ratings, namely if the government effectively addresses the governance issues, thereby boosting the growth potential and attracting higher foreign direct investment to the tradables sector, or if the GDP registers a higher growth than anticipated so that the general government finances consolidate more rapidly.