Bulgaria

This report does not constitute a rating action. Overview Institutional and economic profile Flexibility and performance profile Political instability could complicate the eurozone accession process, but should not derail it. The inflation criteria for eurozone accession appears to be within reach in the coming months. --We expect that either a new or a caretaker government will continue with the eurozone accession process; we think membership is still likely by early 2026. --Bulgaria's fiscal position is a ratings strength, characterized by contained deficits below 3% of GDP and low net general government debt, which we project at below 20% of GDP on average through 2027. --Strong consumption will underpin growth in 2024 and 2025, net exports to remain a drag. --We

...Even if a stable government does not emerge from the ongoing coalition negotiations, we think eurozone accession is likely by early 2026. In late October, Bulgaria had a snap election, the seventh general election in just over three years. Political fragmentation will likely make government formation efforts challenging. However, entry to the eurozone is still feasible, in our view. First, there is a broad political consensus on eurozone accession across major political parties and the caretaker government has a legislated mandate to submit the request to the...

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