Standard and Poor's Ratings Services cut Bulgaria's sovereign credit ratings by one notch to BBB- on Friday. 

The main reason, according to the agency, was the country's political environment, which poses risks to much-needed reforms.

S&P said the revision reflects the view that the absence of meaningful progress on reforms will constrain economic growth and keep unemployment high.

"Bulgaria's political environment continues to pose a challenge for the implementation of reforms needed to tackle deep-rooted institutional and economic problems," Standard and Poor's said in a statement. "We expect that the political landscape will remain volatile over the coming months and will likely not be conducive to implementing potentially unpopular reforms," it said.

The credit ratings agency has however revised the country's outlook to stable from negative, citing the low public debt levels of  Bulgaria.

The downgrade will probably affect the cost at which Bulgaria can price its pending Eurobonds of up to EUR 1.5 B, needed to fund its budget deficit and roll over maturing global bonds next January.

Bulgaria is rated at investment grade BAA2 by Moody's and BBB- by Fitch. The two hold stable  outlook.

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