(Reuters) -Global ratings agency Fitch on Thursday upgraded Bulgaria's long-term foreign-currency issuer default rating to 'BBB+' from 'BBB', citing the approval of Bulgaria's euro adoption scheduled
Fitch Upgrades Bulgaria's Rating to 'BBB+' Following Euro Adoption Approval
(Reuters) -Global ratings agency Fitch on Thursday upgraded Bulgaria's long-term foreign-currency issuer default rating to 'BBB+' from 'BBB', citing the approval of Bulgaria's euro adoption scheduled for January 2026.
The rating agency said euro zone membership will grant Bulgaria reserve-currency status, strengthen its monetary policy framework, lower transaction costs, remove exchange-rate risks for corporate and household balance sheets, and offer additional external funding opportunities.
"Bulgaria's ratings are supported by its strong external and public finance balance sheets versus 'BBB' peers and credible policy framework, underpinned by EU membership," Fitch said in a statement.
However, the agency flagged challenges such as low labor productivity, unfavorable demographics, and institutional constraints that have delayed structural reforms.
Fitch noted that political instability, including a history of unstable coalition governments, has hindered reform implementation and slowed the absorption of EU funds.
EU finance ministers last month gave formal support to Bulgaria joining the euro zone after positive assessments of the country's readiness from the European Commission and the European Central Bank.
The country will join the single currency at the start of next year at a rate of one euro to 1.95583 lev.
(Reporting by Antonis Pothitos; Editing by Tomasz Janowski)
