The international agency Fitch Ratings has affirmed Bulgaria's rating - "BBB+", and raised its outlook to positive from stable.
The positive outlook reflects reduced political uncertainty following the formation of a government with a single-party parliamentary majority. This is viewed by the rating agency as an opportunity for progress in the area of structural reforms to support potential growth, increase welfare, as well as to improve public sector management, building on our country's accession to the eurozone, news.bg pointed out.
The analysis noted that the current rating is conditioned by the benefits of membership in the eurozone and the EU, as well as by the stable indicators of public finances and external balances. However, these strengths are partially offset by risks of the economy overheating, stemming in part from pro-cyclical fiscal policy, high inflation and current account deficits, among other factors.
Fitch Ratings said that economic growth in the country has been holding steady at around 3% since 2024, despite various external shocks and weak growth in the EU economy, with the pace remaining well above the eurozone growth of around 1%. The rating agency forecasts GDP growth to gradually slow to 2.4% by 2028, with a rebalancing in the structure towards slower domestic demand growth and improved export performance.
It is noted that there are signals of macroeconomic imbalances, mainly stemming from the strong nominal wage growth over the past three years. This has stimulated a sharp increase in household consumption, which contributes to the significant widening of the current account deficit, forecast to increase to 7.4% of GDP in 2026, which is significantly above the levels typical of countries with a similar credit rating. According to the forecast of Fitch Ratings, average annual inflation will reach 4.9% this year and will remain above the average for countries with a "BBB+" rating. in the period 2027-2028.
The factors that would lead to an increase in the rating are considered to be the weakening of macroeconomic imbalances and the successful implementation of structural reforms. While the worsening of imbalances, a sharp decline in GDP growth, for example as a result of reduced competitiveness, as well as a significant increase in the ratio of government debt to GDP, are factors that would be reflected in a lower credit rating.