Expected progress on euro area accession, supported by new government, and sustained macro-economic stability drive the Outlook revision. Vulnerability to shocks, governance challenges and adverse demographics are constraints.

The inclusion of the Bulgarian lev in ERM II, joining the Banking Union, low public debt alongside strengthened external and banking sectors are strengths. Vulnerability to shocks, governance challenges and electoral uncertainty are ratings constraints.

Bulgaria’s declining public debt, advancement of reforms and adherence to convergence criteria, and strengthened external resilience underscore the upgrade. Vulnerability to shocks, financial system risks, and governance concerns are constraints.

Bulgaria’s low public debt, commitment to reform and strengthened external resilience drive the outlook change. Vulnerability to shocks, private sector debt risks, lack of a lender of last resort for banks, and institutional concerns remain constraints.