novinite 21 January 25010

Moody's Changes Bulgaria’s Rating Outlook to Positive

Moody's Investors Service has changed Thursday the outlook on the Bulgarian government's Baa3 ratings from stable to positive.

This rating action on part of Moody’s restores the positive outlook of Bulgaria which was in place before the start of the financial crisis in September 2008, and is the first positive rating action on an EU member state since July 2008.

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The Bulgarian government's finances were relatively resilient through the 2008-09 financial crisis. Despite a deep recession, Bulgaria will have very low budget deficits by global standards in 2009 and 2010, keeping government debt ratios low and stable,&
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says Kenneth Orchard, Vice-President/Senior Credit Officer in Moody's Sovereign Risk Group, as quoted by finchannel.com.

He is quoted as saying that an upgrade of the Bulgarian rating perspective to Baa2 is contingent upon the country's ability to renew growth. and weather the impact of regional shocks. Yet, he has pointed out that the economic problems in Greece could hinder the Bulgarian recovery as 9% of the Bulgarian export goes to Greece, and Greek companies are major foreign investors in the country.

According to Orchard, Bulgaria’s economic growth should resume in 2011-12 thanks to significant EU funds and FDI ”attracted by the low cost base“. His forecast is that after the recovery the Bulgarian economy will be growing at about 3%-4%, below the average rate from before the crisis at about 6%.

Recently, Bulgaria “won“ Moody’s misery index. Bulgarians came in less than a third as miserable as the Spanish.