Fitch Affirms Bulgaria L/T Rating at 'BBB-'
Fitch Ratings has affirmed Bulgaria's long-term foreign and local currency ratings at 'BBB-' and 'BBB', respectively, with stable outlooks.
Bulgaria’s country ceiling has been affirmed at 'BBB+'
“Bulgaria's 'BBB-' rating is supported by its relatively low government debt and improving external balance sheet,” Fitch said in a rating update on Friday.
The global rating agency however noted that Bulgaria, one of the poorest countries in the EU, “faces structural challenges to boost its long-term potential growth rate and improve GDP per capita to levels in line with similar and higher rated peers.”
It is unlikely that early parliamentary elections will be held before the presidential elections in October 2016, although the position of the government is “certainly weaker and this could slow progress on reforms” after left-wing Alternative for Bulgarian Revival party left the governing coalition, according to Fitch
“The Stable Outlook reflects Fitch's assessment that upside and downside risks to the rating are currently balanced, according to Fitch.
Bulgaria’s economy will expand by 2.1% in 2016, after last year’s real GDP growth of 3.0%, Fitch said.
“A slower rate of growth reflects our forecast for a contraction in investment this year, consistent with the ending of the 2007-2013 EU funding cycle,” Fitch said.
Also on Friday, Standard & Poor’s said it affirmed its long-term and short-term sovereign credit ratings on Bulgaria at 'BB+/B', with a stable outlook.
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