Fitch Raises Bulgaria Rating Outlook on Single-Party Government

The international credit rating agency Fitch Ratings has upgraded its outlook on Bulgaria's rating from stable to positive. The move reflects reduced political uncertainty following the formation of a government with a single-party parliamentary majority, which is seen as an opportunity for progress in structural reforms.

Fitch Ratings affirmed Bulgaria's rating at 'BBB+', citing benefits from membership in the eurozone and the EU, as well as stable public finances and external balances. However, these strengths are partially offset by risks of economic overheating due to pro-cyclical fiscal policy, high inflation, and current account deficits.

Economic growth in Bulgaria has been steady at around 3% since 2024, despite external shocks and weak EU growth. Fitch Ratings forecasts GDP growth to slow to 2.4% by 2028, with a rebalancing towards slower domestic demand growth and improved export performance.