S&P Global Ratings changed the outlook on Bulgaria’s long-term credit rating from positive to stable. At the same time, the agency affirmed the country’s long-term and short-term foreign- and local-currency ratings at BBB+/A-2.
The change reflects the deterioration in budgetary and external-sector indicators. The decision prompted criticism from GERB over the government’s economic and budgetary policies.
GERB MP and former Finance Minister Vladislav Goranov said the change in the outlook demonstrated the cabinet’s inability to tackle the problems facing the economy.
He said the reasons included the high budget deficit, which is not narrowing at the necessary pace, rising consumption and declining investment. According to Goranov, these processes are deepening the current account deficit in the balance of payments.
This double deficit for our economy means one thing – we borrow, consume and finance the rest of the world through imports exceeding exports.Goranov said S&P’s assessment would provide grounds for a serious debate during the budget’s first reading next week. He noted that GERB had initially given the cabinet time and had avoided criticising its economic policy.
The government is failing to address a single one of the problems our society is facing. And unfortunately, it is wasting our time.Petkova: The budget does not provide for genuine consolidation
Former Finance Minister Temenuzhka Petkova said S&P’s assessment was a signal to the government to curb spending and bring the deficit under control. In her view, if such measures are not taken, a downgrade of the credit rating could follow.
Petkova described the proposed state budget as an “illusion of consolidation”. She pointed out that the consolidated fiscal programme showed no significant reduction in spending or implementation of reforms.
If we take a quick look at the consolidated fiscal programme under the proposed draft State Budget Act, which has still not been submitted to the Bulgarian Parliament, we will see that there is no such consolidation.According to her, the only significant reduction is in capital expenditure, but this is related to the completion of the Recovery and Resilience Plan rather than to targeted government action.
Petkova called on those in power to heed the rating agency’s warning and take measures to prevent further financial difficulties.
We need to take action so that we do not plunge our country into additional financial crises and problems.In her statement, she also commented on the withdrawal of the proposed amendments to the Personal Assistance Act. According to Petkova, the decision demonstrated a lack of transparency and an attempt to test public reaction before those in power assumed political responsibility.
Source: nova.bg