Bulgaria – Stable Credit Rating Despite Turmoil
One of the leading credit agencies „Standard & Poor‘s” officially announced that there is no risk in decreasing Bulgaria’s credit rating. At this stage it preserves its stable perspectives despite turmoil in political and banking aspects.
According to the agency that downgraded the country’s rating at the beginning of July there is no reason for panic since the bank crisis seems already handled. Spread of uncertainty in bank institutions in general followed by mass cash withdrawals did not happen mostly thanks to the prompt and effective reaction of all local institutions.
Additional evidence supporting the financial stability of the country are the positive fiscal numbers in the last few years as well as the approval of 3,3 billion state financial aid in the form of a precaution clearly aiming at ensuring the cash liquidity of the bank system.
Despite the recent turmoil the agency’s statement does seem based on another extremely important fact – the clarity of the political crisis resolution. Following intense negotiations among key political parties there has been a consensus about an early election date that should cease the political uncertainty in the country. It is expected to result in the formation of a stable government with perspective of a full and effective office. This government will bear the responsibility to execute a series of unpopular and intentionally delayed painful reforms in many economic sectors.
It is obvious that long-term stability in its pure sense can be predicted or guaranteed by no-one which is why „Standard & Poor‘s” clarify their statements refer to the current economic conditions.
What matters is, however, that Bulgaria managed to preserve its positive image and the impression of a relative stability – in fiscal as well as investment aspect. Beyond doubt, the main economic subjects are well aware of the fact that intentional destabilization attempts against certain economic segments (e.g. Bulgaria’s bank system) and the present lack of political consensus aren’t capable of exacerbating the investment environment as long as governments adhere to the major principles of stability and apply reasonable state policies as this happens in Bulgaria.