Fitch Affirms Bulgaria's Rating

Fitch Ratings has affirmed Bulgaria's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BBB' with a Positive Outlook, citing strong external and public finances, EU membership, and a stable currency board as key strengths, CE Report quotes BTA

The Positive Outlook reflects progress toward euro adoption. Bulgaria submitted a request for an extraordinary convergence assessment in February 2025 after meeting Maastricht criteria. If approved, the country could adopt the euro as early as January 2026.

Fitch also highlighted the formation of a new minority government in January 2025, following October's snap elections. The coalition’s key goals include eurozone entry and implementation of reforms under the EU’s Recovery and Resilience Facility.

The agency revised its 2025 growth forecast for Bulgaria to 3.1%, up from 2.5%, citing improved political stability and strong wage growth. Growth is expected to reach 2.8% in 2026, with upside risks linked to euro adoption.

Despite a moderate rise in inflation and a fiscal deficit of 2.8% in 2024, Bulgaria’s public debt remains low at 24.1% of GDP and is projected to stay well below the 'BBB' peer average through 2029.

Risks to the rating include political instability or delays in eurozone accession. Conversely, progress on euro adoption and improved growth potential could trigger an upgrade.