According to Moody’s Investors Service “Bulgaria’s Baa3 government bond ratings and stable outlooks are supported by the government’s firm fiscal position and low debt burden, but constrained by the prospects of a difficult recession”. Moody’s expects Bulgaria’s GDP to contract by at least 5.0% in 2009 as a result of a sharp fall in exports on the back of the deep recession in the EU. Bulgaria’s budget deficit is expected to be 2.7% of GDP in 2009, which according to Moody’s will be one of the lowest in the EU. According to the rating agency, Bulgaria entered the recession in good condition. Past fiscal discipline paid off for Bulgaria and the reduction in government revenues in 1H09 did not lead to an enormous budget deficit as it did elsewhere. Moody’s expects the growth setback in Bulgaria to be temporary and “real income convergence to resume eventually”.