The international rating agency Fitch Ratings has affirmed Bulgaria’s foreign-currency issuer default rating (IDR) at 'BBB' with a positive outlook, the Ministry of Finance press centre has announced.

It has a positive outlook and reflects the country’s plans of membership of the Eurozone. According to Fitch Ratings, short-term downside risks tied to the coronavirus pandemic have eased and are more than offset by prospects of substantial EU funding for investment and a broad commitment to macro and fiscal stability (anchored by the inclusion since July 2020 of the Bulgarian lev into Exchange Rate Mechanism II; ERMII). Fitch forecasts average inflation will rise to 5.2% in 2022, the highest rate since 2008. After a better-than expected outturn with a government deficit of 3.8% in 2021 due to strong revenue growth, we expect the general government deficit to fall to 3% in 2023 from 4.6% this year, Fitch writes. This would be consistent with the public debt/GDP ratio increasing to 30% in 2023, from 20% in 2019 and still well below the current 'BBB' median of 60.3%.

According to Fitch Ratings, Bulgaria's banking sector maintained adequate liquidity through 2021 and capitalisation remained solid. The agency warns that a delay in the timeline of Eurozone accession, a prolonged rise in public debt, or weaker growth prospects could lead to to negative rating action/downgrade.