Fitch affirms Bulgaria's credit rating at 'BBB'; Outlook remains positive

The Ruse Chamber of Commerce and Industry informs the business community in the region that Fitch Ratings has confirmed Bulgaria's long-term credit rating in foreign currency at the 'BBB' level with a positive outlook. This is key news for businesses, especially those operating in an international environment, as credit rating stability has a significant impact on the investment climate and confidence in the economy.

Key Factors for The Rating

Bulgaria continues to maintain strong external and public balances, which are significantly better than other countries with the same rating. This also includes a stable macroeconomic policy, supported by the country's membership in the European Union and the functioning of the currency board. However, challenges related to low labor productivity and an unfavorable demographic structure continue to limit the potential for long-term economic growth.

Prospects for Euro Adoption

The positive outlook given by Fitch reflects expectations for Bulgaria's progress in the process of adopting the euro. Although it may be delayed beyond the original target of January 2025, there remains broad political support at both national and European level for the introduction of the single currency. This is an important moment for businesses in Ruse and the region, as the adoption of the euro would provide additional stability and facilitate access to European markets.

Economic Growth and Inflation

Fitch forecasts gross domestic product (GDP) growth of 2% in 2024, slightly higher than the 1.8% achieved in 2023. Private consumption and investment activity remain robust despite political uncertainty. Inflation, which was 1.5% in September 2024, is expected to pick up slightly in the coming months but remains relatively stable.

Low Public Debt and Strong External Finances

One of the most significant advantages of Bulgaria is the low level of public debt, which is expected to remain significantly below the average for the European Union. Fitch forecasts a gradual increase in the debt-to-GDP ratio to 24.7% in 2024, which remains one of the lowest levels among 'BBB'-rated countries.

Bulgaria also maintains strong external positions, with the country's reserves covering 7.6 months of external payments in 2024. Bulgaria's external position is expected to remain stable in the coming years.

Conclusion

The confirmation of Bulgaria's rating by Fitch and the positive outlook provide businesses in the region with stability and confidence, especially in the context of the international economic environment. Projected economic growth and progress in the euro adoption process provide opportunities for investment and business expansion.

For more information about the opportunities that Bulgaria's economic stability provides for business in Ruse and the region, you can contact the team of the Ruse Chamber of Commerce and Industry.

Source: Fitch Ratings
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