Fitch keeps Bulgaria’s credit rating unchanged at ‘BBB+’, outlook stable
Fitch Ratings has affirmed Bulgaria’s long-term foreign and local currency ratings at ‘BBB+’, with a stable outlook, in its first rating decision since Bulgaria formally joined the euro zone on January 1. The ratings agency previously raised the country’s rating by one notch in July 2025, when Bulgaria’s euro area accession was approved.
Fitch said that the rating reflected “strong external and public finance balance sheets and a credible policy framework underpinned by EU and eurozone membership,” but was balanced by weakened institutional capacity stemming from frequent elections and unstable coalition governments, as well as high perception of corruption.
“The Stable Outlook reflects Fitch’s expectation that renewed domestic political uncertainty, and external geopolitical risks will not derail Bulgaria’s solid economic growth nor lead to a build-up of macroeconomic, fiscal or external imbalances,” the agency said.
Following Bulgaria’s euro zone accession, Fitch said that it expected the country’s membership in the common European currency area to “further enhance Bulgaria’s integration with core eurozone countries and boost its institutional capacity,” at the same time reducing external and financial vulnerabilities.
On the topic of elections, given that Bulgaria was due to hold its next snap polls, the eighth since 2021, on April 19, the ratings agency noted that the fiscal and economic agenda of former president Roumen Radev was unclear. Radev’s Progressive Bulgaria coalition is currently the front-runner in opinion polls.
Fitch said that Bulgaria’s 3.1 per cent economic growth last year was well above the 1.4 per cent euro zone average and the 2.3 per cent median in its peer group, but lower than the 3.4 per cent recorded in 2024. It projected growth to slow down further to 2.9 per cent in 2026.
As regards inflation, Fitch projected that it would remain above the European Central Bank’s two per cent inflation target in coming years, reflecting price convergence with euro area peers.
The biggest risk to Bulgaria’s growth prospects was the ongoing conflict in the Middle East, its duration and intensity potentially weighing down growth “through higher inflation and increased uncertainty,” the credit ratings agency said.
Other factors that could lead to a ratings downgrade were a buildup of macroeconomic imbalances or weaker economic growth, as well as a significant increase in general government debt-to-GDP ratio over the medium term.
On the upside, an upgrade was possible if Bulgaria showed a “sustained improvement in political stability and institutional capacity that supports reform implementation and convergence of structural indicators towards those of higher-rated peers” or a reduction in macroeconomic imbalances and stronger growth.
(Photo: kavitakapoor/flickr.com)
Please support independent journalism by clicking on the button below. For as little as three euro a month or the equivalent in other currencies, you can support The Sofia Globe via patreon.com and get access to exclusive subscriber-only content:
