The appearance of indicators of a weakening of the institutional framework in Bulgaria or if the process of adopting the euro is delayed even more will be perceived as grounds for downgrading Bulgaria's credit rating. It is expected that Bulgaria will enter the Eurozone no later than the beginning of 2026. The growth of the economy for this year will be 2.9% and a "worsening debt burden for the government".
This is stated in the message of the rating agency "Moodis" (Moody's) on the occasion of the periodic review of Bulgaria's rating.
This is a procedure for an updated assessment of the country's credit profile, which is different from actions affecting the credit rating of the agency and is not a signal whether a similar move by "Moodys" will be made soon, the message specifies.
But what was stated in it once again is indicative: the fight against corruption remains a significant challenge and amplifies the negative effect of the economy's structural flaws such as an aging population and weak infrastructure, quotes "Diary".
"Moody's" pays special attention to the ongoing domestic political crisis, emphasizing [in it] the likelihood of new early elections and the potential undermining of the effectiveness of institutions due to the structural nature of the political crisis," the agency's announcement added.
Efforts to introduce the single currency are among the three factors with a positive effect on the country's credit profile (the others are the low level of government debts, i.e. the ability to take more loans if needed, as well as EU membership) . The very pursuit of the Eurozone has already contributed to the development of institutional and managerial strength, the authors add.
They explicitly state that "the stable outlook for the rating is related to balanced risks, resulting from the positive effects of the potential for the introduction of the euro". This outlook assessment also depends on how much the debt burden will increase, whether the ability to take loans will deteriorate, the risks to the implementation of the National Recovery Plan "and to other political priorities due to the political stalemate".