SP Global Ratings has upgraded the outlook for Bulgaria’s rating

The international rating agency SP Global Ratings has upgraded the outlook for our country’s rating from stable to positive and confirmed Bulgaria’s long-term and short-term credit ratings in foreign and local currency at ‘BBB/A-2’. The positive outlook reflects the rating agency’s view that there is a one-in-three chance Bulgaria will join the Eurozone within the next 24 months.

The ruling coalition, formed in June, represents the first stable government in Bulgaria in the past two years, following five parliamentary elections. One of the government’s main political goals is the country’s accession to the Eurozone, which is planned to be achieved by January 1, 2025. Bulgaria may not meet all the convergence criteria, particularly the one for price stability. Even if Bulgaria does not join the Eurozone in 2025, the rating agency expects that accession is likely to be postponed to January 1, 2026.

Despite the aging workforce, Bulgaria’s economy has strong prospects for real growth, with average rates of 3% for the period 2024-2026, primarily driven by domestic demand. Consumption will remain robust due to strong labor market performance, which supports the increase in real wages. The substantial EU funds for Bulgaria, which SP Global Ratings estimate at over 30% of GDP for 2023, will support investment activity in the coming years. However, receiving and utilizing all available funds will be a challenge, as deadlines for key funding programs are approaching – the EU Multiannual Financial Framework 2014-2020 and the Recovery and Resilience Facility under the program Next Generation EU” (NGEU) program.

Link to the full news: https://www.minfin.bg/bg/news/12432

Source: Ministry of Finance – https://www.minfin.bg

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