Bulgaria Should Follow in Estonia's Footsteps after Moody's Upgrade - Expert

Finance | July 24, 2011, Sunday // 20:11|  views

Moody's recent upgrade of Bulgaria's debt is the first step towards distinguishing it clearly from the troubled countries in the region, a local expert argues.

"This is the beginning of a process of differentiation, which - if brought to an end through sound economic policies - can restore investors' confidence in Bulgaria despite the problems of the other countries in the region," Georgi Angelov, Senior Economist with the Open Society Institute – Sofia, has commented.

"In 2009 Estonia was able to steer clear of the problems of the Baltic countries and achieved a rapid recovery of investments and economic growth. Now Bulgaria has a chance to achieve such development," Angelov says.

However, this will require stepping up efforts to cope with the budget deficit as quickly as possible and adopt a reformist economic policy, he adds.

Moody's Investors Service upgraded on Friday Bulgaria's government debt ratings to Baa2 with a stable outlook from Baa3 in a long-anticipated review.

The agency said the improvement reflects Bulgaria's ongoing fiscal discipline and improving institutional strength as well as the financial system's relative resilience in a volatile regional environment.

Now Bulgaria has the highest rating of all the Balkan countries, higher than Greece, Romania, Macedonia, Turkey, Serbia, Montenegro, Albania, Bosnia. Only Slovenia, a member of the euro area has a higher rating. Moreover, Bulgaria's rating is even higher than that of the troubled euro area member states - Portugal, Greece, Ireland, Latvia, Hungary - which was not so only a few months ago.

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Tags: currency peg, currency board, ERM 2, ERM II, liquidity, debt crises, debt crisis, Eurozone, euro zone, sovereign debt, Greek debt, banking system, BNB, Bulgarian National Bank, Finance Ministry, Cabinet, outlook, debt ratings, credit ratings, credit rating, Tags: Moody's, Moody's, Bulgaria


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