The international rating agency Standard & Poor (S&P) Global Ratings upgraded Bulgaria's long-term and short-term foreign and local credit ratings to 'BBB / A-2' from 'BBB- / A-3'. The outlook for the rating is positive, the Bulgarian Finance Ministry said late Friday.
The rating increase is a result of the sustainable development of the Bulgarian economy without accumulation of macroeconomic imbalances. The country's fiscal and external balances are strong, and progress on accession to the Exchange Rate Mechanism II (ERM II) is steady. The positive outlook for the rating reflects the expectations of S&P Global Ratings analysts that Bulgaria's progressively strengthening fiscal and external position will continue, with the country developing steadily in a weaker external economic environment.
According to the rating agency, the country has fulfilled its commitments under the ERM II Accession Plan and the Banking Union, but S&P also notes that the final decision on this is not entirely under its control. Institutional convergence has advanced. Legislative changes have been made in the area of macroprudential regulation and the powers of the central bank. The insolvency framework, the management of state-owned enterprises, the supervision of the non-banking financial sector and the framework for combating money laundering have all been improved.