Opposition parties slam Bulgaria’s Radev government over S&P Global Ratings downgrade

In statements on November 14, opposition party GERB and the Democratic Bulgaria coalition slammed Bulgaria’s Roumen Radev government over the decision by S&P Global Ratings to revise downward its outlook on Bulgaria’s BBB+ credit rating to stable, citing “growing twin deficits” as one of the reasons for its decision.

Vladislav Goranov of GERB, a former finance minister, said that the ratings decision was a sign that the government is failing to find a solution to the country’s economic problems.

“The assessment by S&P Global Ratings will serve as an excellent foundation for next week’s debate on the first reading of the budget,” Goranov said.

“Unfortunately, the conclusions are already clear. The administration is failing to address any of the problems facing our society, and, regrettably, it is just wasting our time,” he said.

GERB MP and former finance minister Temenuzhka Petkova described the proposed draft budget as “a budgetary illusion” and criticized the government’s performance.

“There is no real reduction in spending, and no reforms have been carried out,” Petkova said.

“The only area where spending has been cut is capital expenditure. One of the most serious shortcomings of this government is precisely its inability to communicate, as well as its arrogance and haughtiness,” she said.

“I hope that Roumen Radev’s government will not show its traditional arrogance, will familiarise itself with the Standard & Poor’s assessment and will not drag our country into crises and problems,” Petkova said.

Democratic Bulgaria said that because of the expectation of reforms, six months ago S&P had raised the outlook on Bulgaria’s credit rating.

Today it has changed it back – from positive to stable, Democratic Bulgaria said.

The government submitted two of the worst draft Budgets – for 2026 and 2027, and the reform plan turned out to be an unfulfilled promise, it said.

S&P forecasts a record budget deficit of 5.1 per cent of GDP in 2026. The current account deficit is expected to reach 8.7 per cent of GDP – the highest level in 18 years, the statement said.

“The economy is overheating, spending is growing, debt is increasing and we are losing competitiveness,” Democratic Bulgaria said.

When the 2026 Budget was being discussed, Democratic Bulgaria proposed a deficit of 3.9 billion euro instead of 7.3 billion euro (below three per cent of GDP), “but the majority rejected all 18 of our proposals”.

The statement said that S&P describes the measures to control the Budget deficit for 2027 as ineffective and explicitly points out the one-time tax on excess profits, from which the government expects 800 million euro.

“One-time revenues do not finance permanent expenses,” Democratic Bulgaria said.

“This is the problem that we at Democratic Bulgaria have been warning about for months. Radev’s fiscal policy is already weighing on the country’s creditworthiness and increasing the risk of recession and debt spiral in 2028,” it said.

The coalition said that Radev’s government has an independent parliamentary majority.

“No one is stopping it from carrying out the necessary reforms. Instead of explaining that everything is the opposition’s fault, the government should show which inefficient expenditures it will stop, how it will reform the administration and the Interior Ministry, and how it will create conditions for more investment, production, and exports.”

If budget problems are not brought under control, the agency warns that the next step could be a credit rating downgrade – something that has not happened since the bankruptcy of Corpbank in 2014, Democratic Bulgaria said.

The opposition coalition said that it is demanding a rewrite of the 2027 Budget with a deficit below three per cent of GDP in order to reduce the risk of losing growth and falling into recession.