International credit rating agency Fitch Ratings has improved its outlook on Bulgaria's currency ratings to positive from negative. This reflects Bulgaria's declining debt levels and recovering economy, reported by Dow Jones Newswires and the Wall Street Journal.
The credit ratings company said a further upgrade is possible if Bulgaria's banking sector shows clearer evidence of stabilization, and the budget deficit and external debt are reduced further.
Bulgaria's GDP was up 2.5% in the first quarter of 2011 from a year earlier, driven by exports, though well below the 4.9% before its pre-crisis peak. Fitch expects GDP growth of 3% this year and 3.8% next year, compared with 0.2% in 2010. The official estimate of the Bulgarian government for 2011 is a GDP growth of 3.6%, and 4.1% for 2012.
Recent strong trade performance has helped Bulgaria cut its current-account deficit to 1% of GDP last year, from 8.9% in 2009 and 23% in 2008. The general government budget deficit was down at 3.2% of GDP last year from 4.7% in 2009, and Fitch says a target of 2.5% this year, which is the government's priority, is realistic. Bulgaria's external debt declined by 8 percentage points year-on-year to 41% at the end of 2010.
Moody's Investors Service last month placed the government's ratings on review for a possible upgrade citing factors including its strong balance sheet and expectations the nation's deficit would fall below the European Union's ceiling of 3% of gross domestic product this year.
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The credit ratings company said a further upgrade is possible if Bulgaria's banking sector shows clearer evidence of stabilization, and the budget deficit and external debt are reduced further.
Bulgaria's GDP was up 2.5% in the first quarter of 2011 from a year earlier, driven by exports, though well below the 4.9% before its pre-crisis peak. Fitch expects GDP growth of 3% this year and 3.8% next year, compared with 0.2% in 2010. The official estimate of the Bulgarian government for 2011 is a GDP growth of 3.6%, and 4.1% for 2012.
Recent strong trade performance has helped Bulgaria cut its current-account deficit to 1% of GDP last year, from 8.9% in 2009 and 23% in 2008. The general government budget deficit was down at 3.2% of GDP last year from 4.7% in 2009, and Fitch says a target of 2.5% this year, which is the government's priority, is realistic. Bulgaria's external debt declined by 8 percentage points year-on-year to 41% at the end of 2010.
Moody's Investors Service last month placed the government's ratings on review for a possible upgrade citing factors including its strong balance sheet and expectations the nation's deficit would fall below the European Union's ceiling of 3% of gross domestic product this year.
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More Positive Economic News - Car Sales Rocket
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