EUROPE SOVEREIGN RATINGS – EVOLUTION OF ABILITY TO PAY
Country Total Score Rating Market View Ability To Pay
2011 2011 2011 2008 2009 2010 2011
Estonia 90 A+ 3 – 58 67 89
Russia 80 A- 3 66 64 80 85
Kazakhstan 75 B 3 64 58 76 76
Czech Republic 74 B 3 73 49 56 60
Slovakia 72 B- 3 – 45 64 56
Bulgaria 71 B- 3 65 64 64 65
Macedonia 67 C+ 3 73 69 55 51
Poland 67 C+ 2 53 47 56 45
Romania 65 C 3 51 34 56 53
Latvia 65 C 3 69 60 45 65
Turkey 62 C- 3 62 42 53 56
Croatia 59 D+ 4 62 44 51 55
Hungary 58 D+ 3 56 56 40 38
Lithuania 54 D 3 – 45 45 44
Serbia 52 D- 3 55 47 42 33
Ukraine 49 E+ 4 12 23 29 45
Bosnia-Herzegovina 37 E- 4 62 44 36 38
Sovereign ratings in ranges from A to E, with + indicating that a credit is in the top of its range (eg B+ is 77, 78, 79), and – indicating it is near the bottom (e.g. B- is 70, 71, 72). Market outlook is on a scale of 1 to 5, from very bullish to very bearish, with 3 being neutral. Ability to Pay is a mark out of 55. Total is out of 100. Source: BMI, 

The “Ability to Pay” Index Puts Bulgaria In The Top 6 Countries From The Emerging European Market

With this report presentation we will continue with the macroeconomic analysis of Bulgaria as it is today, compared to the economic, financial and political current situation in the other countries from the so-called emerging European market. It is our belief that such independent reports are truly enlightening and useful in understanding and assessing the Bulgarian market together with the investment opportunities, challenges and risks, related to it.

According to the Europe markets’ latest report regarding “the ability to pay” matter among emerging European sovereigns, Bulgaria is ranked 6th in the overall ranking. But let us first clarify the term “ability to pay”.

The “ability to pay” term indicates the level to which a certain country is capable of meeting its current and future debt obligations. It is pretty much related to the fiscal situation of the certain country and to another economic term “willingness to pay”, which basically describes the maximum amount that a country would be willing to pay, sacrifice or exchange in order to receive a good or avoid something undesired. The ability to pay term is indicative for the overall fiscal position of the country, as well as its fiscal discipline, financial and political stability and home demand levels. The bigger “the ability to pay” indicator is, the lower the sovereign risk rating, which is an essential decision-making tool for a future investment opportunity.

Bulgaria demonstrates a very decent position in this ranking by being placed ahead of countries like Poland, Latvia, Turkey, Hungary, Croatia, Ukraine, Romania, etc. The overall conclusion of the report is very optimistic, not only regarding Bulgaria, but also regarding the entire emerging European market, which demonstrates a serious improvement and strategic growth.