Fitch Ratings has affirmed Ukraine’s long-term foreign-currency issuer default rating at “CCC” in a press release, citing elevated credit risks stemming from the ongoing war and its impact on the country’s fiscal and macroeconomic stability.

The agency said the rating reflects the strain of continued hostilities, including sustained Russian attacks on energy and civilian infrastructure, alongside large fiscal deficits and uncertain economic prospects. Fitch does not assign outlooks to sovereigns rated “CCC+” or below.

At the same time, Ukraine’s credit profile is supported by manageable near-term debt servicing needs, substantial foreign exchange reserves and continued backing from international partners, particularly the EU.

Ukraine’s long-term local-currency rating was affirmed at a slightly higher “CCC+”, reflecting the government’s continued servicing of domestic debt. Fitch noted that much of this debt is held by state-owned banks and the central bank, reducing the benefits of any potential restructuring.

The agency highlighted that Ukraine’s fiscal deficit widened to 23.5% of GDP in 2025, driven by record defence spending, and is expected to remain elevated in the coming years. However, financing risks in the near term are mitigated by external assistance, including a €90bn EU support loan expected to cover a large share of funding needs.

Economic growth is projected to slow to 1.6% in 2026 before recovering modestly to 2.7% in 2027, though Fitch stressed that the outlook remains highly uncertain and dependent on the trajectory of the war.

Inflation is expected to rise to an average of 8.5% this year, fuelled by higher energy and transport costs, while the current account deficit is forecast to widen further due to increased imports linked to defence and energy needs.

Fitch also pointed to governance challenges and the strain on reform momentum, noting delays in meeting some international benchmarks. Nevertheless, ongoing donor support and debt relief measures, including an extension of the official creditor standstill to 2030, continue to underpin Ukraine’s financial stability in the near term.