Stara Zagora Municipality receives positive credit outlook upgrade from S&P Global

S&P Global Ratings has upgraded the outlook for the long-term credit rating of Stara Zagora Municipality from stable to positive, while affirming its long-term credit rating at ‘BBB-’.

The agency’s assessment highlights the municipality’s consistent financial position, low debt levels, and expected resilient economic progress. Stara Zagora is projected to benefit from Bulgaria’s economic growth, with an expected average GDP growth of 2.6% between 2026 and 2029. This growth is expected to support central budget revenues and transfers to local authorities, despite anticipated fiscal consolidation in 2027.

Key strengths identified include effective debt management and high liquidity buffers. The municipality is expected to maintain an effective budget surplus through 2028, with municipal debt remaining below 5% of revenues. However, the agency noted a significant dependence on state funding, which accounts for nearly 70% of the municipality’s operating income. Future rating upgrades could occur if the country maintains economic progress, revenues and state subsidies increase, and the municipality diversifies its funding sources.