S&P Affirms Bulgaria at BBB/A-2, Raises Outlook

Ratings

Rating agency Standard & Poor's on Friday said it affirmed its long- and short-term foreign and local currency sovereign credit ratings on Bulgaria at 'BBB/A-2', revising the outlook to positive from stable in view of at least "a one-in-three likelihood" that Bulgaria will join the eurozone in the next 24 months.

While meeting all convergence criteria, including price stability in light of high inflation, may pose a challenge for Bulgaria delaying eurozone entry beyond the start of 2025, the ratings agency anticipates potential accession by January 1, 2026, it said in a press release. Euro accession will lead to a positive ratings action, "potentially by several notches", in an upside scenario in the next two years, S&P said.

Bulgaria has been running a currency board for over 25 years and its currency (the lev), has been included in ERM II, the stepping stone to the euro, since 2020.

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