Fitch Ratings has affirmed Bulgaria’s Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at ‘BBB-‘, with Stable Outlooks. This was released by Fitch on 2nd December 2016 despite ongoing political insecurity in the country with a government in resignation.

The issue ratings on Bulgaria’s senior unsecured foreign and local currency bonds have also been affirmed at ‘BBB-‘. The Country Ceiling has been affirmed at ‘BBB+’ and the Short-Term Foreign and Local Currency IDRs at ‘F3’.

Higher growth forecast for Bulgaria

Fitch forecasts average real GDP growth of 2.8% for 2017-2018, revised up from 2.4% six months ago. This outlook of higher growth above its current five-year average of 1.8%, suggests progress in convergence towards GDP per capita levels of higher rated peers.

The budget outperformance in 2016 is favourable and Fitch now expects a deficit of 0.9% of GDP (ESA 2010) against the original government’s target deficit of 1.9%.

Bulgaria’s rating is further supported by its favourable external finances. Sustained current account surpluses in recent years and high level of foreign reserve assets provide stability to the country’s existing currency board regime.

Fitch press release