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Investing.com -- S&P Global Ratings raised Bulgaria’s long-term foreign and local currency sovereign credit ratings to ’BBB+’ from ’BBB’ on Thursday, citing the country’s confirmed eurozone accession. The outlook is stable.
The rating agency also affirmed its ’A-2’ short-term ratings and revised Bulgaria’s transfer and convertibility assessment to ’AAA’ from ’A’.
The upgrade reflects Bulgaria’s upcoming eurozone membership, scheduled for January 1, 2026. S&P believes Bulgaria will benefit from the European Central Bank’s credible monetary policy and access to established capital markets, while foreign exchange risk will significantly decrease.
Bulgaria’s economy is forecast to grow by 2.4% in real terms in 2025, with an average growth of 2.8% through 2028. Private domestic consumption will drive this growth, supported by high real wage growth in a tight labor market.
The rating agency noted that Bulgaria’s full Schengen membership, effective since January 1, 2025, along with its eurozone accession, could support trade and international tourism by reducing administrative barriers.
S&P expects Bulgaria’s current account deficit to average 2.5% of GDP through 2028, partly offset by a robust service balance of about 7.0% of GDP from tourism and growing IT service exports.
Despite potential increases in government debt due to state-owned enterprise recapitalization plans, Bulgaria’s general government debt remains modest, with debt net of liquid assets projected to stay below 30% of GDP through 2028.
The stable outlook reflects S&P’s view that Bulgaria’s robust economic growth and low government debt balance the country’s elevated public spending pressure and geopolitical uncertainty.
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