Ministry of Finance

of the Republic of Bulgaria



Fitch Ratings has revised Bulgaria's Outlook to Positive from Stable. The Agency also affirmed Bulgaria's Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at 'BBB-', the Country Ceiling 'BBB+' and the Short-Term Foreign and Local Currency IDRs 'F3'.

The revision of the Outlook to Positive reflects the Fitch Ratings assessment that Bulgaria's external metrics have improved markedly. A prolonged and steady deleveraging and positive current account trends resulted in a better performance in Bulgaria's external finances compared to its 'BBB' peers.

The country's public finances compare favourably with its peers, which has a positive influence for the rating upgrade. Fitch forecasts a fiscal deficit of 0.6% of GDP in 2017, well below the projected 'BBB' median. Public debt will continue declining below that of the rated peers.

GDP growth has strengthened. Fitch forecasts Bulgaria's economy to grow 3% in 2017-18, in line with the five-year median growth of its 'BBB' peers.

Fitch mentions the main factors that could, individually or collectively, trigger positive rating action. These are stronger potential GDP growth and progressive convergence towards peer income levels, higher economic growth without the re-emergence of external imbalances, and fiscal stability supporting the sustainability of public debt.

Future developments that could individually, or collectively, result in the Outlook being revised to Stable include larger fiscal deficits that result in a rapid deterioration of the public debt trajectory, as well as materialisation of contingent liabilities on the sovereign's balance sheet; for example, from state-owned enterprises.                                                               .

You can read the full text of the Fitch Ratings press release here .