At a time when major agencies lowered their ratings for neighboring Greece, and showed mistrust to one of Bulgaria’s major trading partners - Russia, the Moody's Investor Services gave its approval for the medium-term fiscal policy of Bulgaria until 2017, giving a credit rating of Baa2 with a stable outlook. This is the highest rating preceding the extremely difficult to achieve requirements for A rating, and it shows that investments in Bulgarian debt securities are moderately risky.

The medium-term program of the country for government bonds on the international market envisages a new debt of some 8 billion euro. 6 billion will be used to refinance old debts and the remaining two billion will be used to cover the budget deficit. In 2015 the public debt will rise by 3.5 billion euros. This will make the debt as percentage of GDP rise by about 30%, which is twice lower than the average when it comes to countries with similar ratings. In other words, Bulgaria will remain a relatively low indebted country.  You can add to that the fact that the first signs of declining budget deficit have appeared, while the government vowed to reduce the budget deficit to the acceptable level of 3% of GDP set in the Maastricht criteria. The Bulgarian Finance Minister even started talking about a budget surplus and we can agree with the assessments of international experts and observers that the country keeps healthy fiscal policy.

Either way, Bulgaria will have to take new loans and this is where credit ratings come important. The price at which Bulgaria will be financed depends on these ratings. The lower the rating, the greater the interest Sofia would have to pay and vice versa. And when it comes to loans of several billion euro, even a hundredth of a percent means a lot of money.

Stabilization and better prospects for the Bulgarian economy did not go unnoticed by Moody's and other analysts. Recently influential British business newspaper The Financial Times reported that after two difficult years and five governments, protests and banking crisis in 2015 Bulgaria returns to something close to normal. Just a month ago Fitch Ratings confirmed the long-term credit rating of Bulgaria "BBB- / BBB," in foreign and local currency respectively, with a stable outlook.

Although preliminary, the recognition of the rating agency for the credibility of the medium-term program of the Bulgarian government is a prerequisite for issuing Bulgarian securities on the Luxembourg Stock Exchange. This alone would significantly increase confidence in Bulgarian bonds and reduce the cost of borrowing money. Moreover, Moody's says the rating could be positively affected in the future by external factors. This might happen if the country joined the Exchange Rate Mechanism of the Eurozone or reduced the share of external debt in GDP.

In all cases, the new positive assessment of the policy of the Bulgarian government is an additional incentive for the realization of planned and necessary reforms.

English: Alexander Markov