site.btaUPDATED Fitch and S&P Upgrade Bulgaria’s Credit Rating

International credit rating agencies Fitch Ratings and S&P Global Ratings have upgraded Bulgaria’s long-term foreign currency credit rating to “BBB+” with a stable outlook. This marks the highest level within the upper-medium investment-grade category, the Ministry of Finance said.

According to both agencies, the key factor behind the rating upgrade is the official decision by the Council of the European Union confirming Bulgaria’s accession to the eurozone, effective January 1, 2026. 

The recent upgrade of Bulgaria’s credit rating by international agencies Fitch Ratings and S&P Global Ratings was expected, following trends observed over the past two decades. In June, Bulgaria’s Fiscal Council noted that every country approved for eurozone accession in the last 20 years received a credit rating upgrade within a month of the decision.

At the end of May, S&P affirmed Bulgaria’s long- and short-term sovereign credit ratings at “BBB/A-2” in both foreign and local currency, maintaining a positive outlook. The agency noted that approval for euro adoption could trigger a rating upgrade. Similarly, Fitch confirmed Bulgaria’s “BBB” rating with a positive outlook back in April.

In their rationale for the recent upgrade to “BBB+”, S&P highlighted the benefits Bulgaria stands to gain from the eurozone: notably, the stability of the European Central Bank’s monetary policy, access to deep and liquid capital markets, and a significant reduction in currency risk. The agency emphasized that EU membership and forthcoming eurozone accession continue to support Bulgaria’s policy credibility.

S&P forecasts stable short-term growth prospects for Bulgaria, projecting real GDP growth of 2.4% in 2025 and an average of 2.8% annually through 2028. The main driver of growth is expected to be private consumption, supported by strong real wage increases amid a tight labor market.

Fitch also views euro adoption positively, stating that it would elevate Bulgarian government debt to reserve currency status, strengthen the monetary policy framework, reduce transaction costs, eliminate currency exchange risks for businesses and households, and open new external financing opportunities. Bulgarian banks would also gain access to ECB liquidity facilities.

Fitch projects real GDP growth of 2.8% in 2025, unchanged from 2024. While global trade uncertainties persist, they are offset by improved domestic political conditions. Strong nominal wage growth and increased consumer spending ahead of eurozone entry are expected to support household expenditures. The agency forecasts real GDP growth of 2.5% in 2026, with potential for further gains linked to euro adoption.