The international credit agency Fitch Ratings has affirmed Bulgaria's long-term foreign currency rating of "BBB+" with a stable outlook.
The rating reflects our country's stable external and fiscal position and the reliable political framework, supported by the country's membership in the EU and the eurozone. At the same time, unstable coalition governments and frequent elections in recent years have slowed progress in implementing reforms.
The rating agency notes that, at current growth rates, per capita income is expected to remain lower than in countries with a similar rating.
The stable outlook reflects Fitch's expectations that renewed domestic political uncertainty and external geopolitical risks will not hinder Bulgaria's solid economic growth, nor lead to the accumulation of macroeconomic, fiscal or external imbalances. External finances remain a strength of the rating despite the reported increase in the current account deficit.
Factors that could potentially lead to a downgrade of the rating include the accumulation of macroeconomic imbalances or a slowdown in economic growth, for example as a result of adverse political events that would make it difficult to implement reforms; a significant increase in the government debt-to-GDP ratio in the medium term, due, for example, to a more expansionary fiscal policy or weaker economic performance.
A future rating upgrade can be expected with a sustained increase in political stability and institutional capacity, which would support the implementation of reforms and the convergence of the country's structural indicators with those of countries with a higher rating. A positive effect on the rating would also be the reduction of macroeconomic imbalances and the achievement of higher economic growth, supported by the implementation of structural reforms or the effective absorption of EU funds.