Fitch affirms Bulgaria's long-term foreign IDR at BBB-, stable outlook.

By bne IntelliNews July 19, 2012
International rating agency Fitch said it has affirmed Bulgaria's long-term foreign and local currency Issuer Default Ratings (IDR) at BBB- and BBB, respectively, reflecting successful fiscal consolidation and stable monetary policy. The outlook on both ratings is stable. Fitch has also affirmed Bulgaria's short-term rating at F3 and Country Ceiling at BBB+. Upward revision of the rating is hindered by weak growth and the still material risk of contagion from intensification of the eurozone crisis. Bulgaria's GDP will grow by 0.9% this year, according to the agency's estimates, driven by domestic demand and increased EU funds absorption and to a lesser extent by exports. Economic growth will accelerate to 1.9% and 2.5% in 2013 and 2014, respectively, provided that Greece remains in the eurozone. Broad political consensus on fiscal consolidation in the country and rapid current account adjustment also contribute to the stable outlook of the country. On the downside, structural weaknesses including low GDP per capita (the lowest in the EU), and the need for reforms to reduce the high unemployment rate and increase the quality of the local labour market, continue to weigh on the country's ratings.

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