Fitch Ratings maintains Bulgaria’s credit rating at “BBB+”

The resignation of Bulgaria’s government highlights the challenges facing the implementation of structural reforms, including tax changes, and how these may affect economic growth, Fitch Ratings writes in its analysis.

However, the political crisis will not affect Bulgaria’s accession to the eurozone on 1 January 2026, which Fitch says remains on track. The agency maintains the country’s “BBB+” rating with a Stable outlook, first affirmed in July, when the EU Council’s Ecofin approved Sofia’s application to join the eurozone.

Fitch notes that Bulgaria’s underlying fiscal position has deteriorated in recent years due to higher social spending, substantial wage increases in the public sector, and delays in implementing reforms, although public debt remains very low - below 30% of GDP in 2025. Fitch Ratings expects the fiscal deficit to rise to 3.2% in 2026 and 4.3% in 2027, up from 3% in 2025. The forecast reflects the outgoing government’s failure to implement planned revenue measures, as well as, for 2027, the impact of military equipment deliveries worth 1.2% of GDP.

Fitch Ratings has also raised its forecast for real GDP growth in 2025 to 3.3% from 3.1%, reflecting better-than-expected results in the first nine months of 2025. Nevertheless, likely delays in the implementation of EU-funded projects and renewed political uncertainty are expected to weigh on growth next year. The agency has slightly revised down its growth forecasts for 2026 and 2027 to 2.7% from 2.8%.

Edited by Ivo Ivanov
English version: R. Petkova