Fitch Affirms Bulgaria'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''

Fitch Affirms Bulgaria'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''

Fitch Ratings has affirmed Bulgaria's long-term foreign and local currency Issuer Default Ratings (IDR) at 'BBB-' and 'BBB', respectively with stable outlooks.

The issue ratings on Bulgaria's senior unsecured foreign and local currency bonds have been affirmed at 'BBB-' and 'BBB', respectively, the global rating agency said in a news release on Friday.

"Bulgaria's ratings are supported by its stronger external finances relative to its 'BBB' range peers. A current account surplus is accompanied by a high level of foreign reserves, which provide stability to its existing currency board regime," Fitch said.

"However, public debt has been pushed closer to the BBB median following one-off costs to fund Bulgaria's Deposit Insurance Fund, eroding a previous rating strength. In addition, large structural weaknesses in the economy constrain potential for higher trend growth."

The rating agency noted that a weak domestic sector has been more than offset by strong growth in net exports.

With average annual growth of 2.7% for the first three quarters of 2015, Fitch has revised up its real GDP growth forecast for 2015 to 2.5%, up 1.3percentage points from the June forecast. For 2016 and 2017, Fitch forecasts real GDP to average 2.6%.

Bulgaria's strong net foreign asset position (estimated at 30.5% of GDP for 2015) is a rating strength and reflects a high level of foreign reserves supporting the currency board, Fitch said.

For 2015, Fitch has left its fiscal deficit projection unchanged at 3.0% of GDP.

"Year-to-date fiscal performance shows strong revenue growth above budget plans and expenditure growth contained. For 2016, Fitch forecasts the fiscal deficit to narrow to 2.5% of GDP, as capital spending falls, but to miss the government's target of 2.0% of GDP."

A key assumption for the affirming of Bulgaria's ratings is that the country's currency board arrangement will remain in place and that governments will continue to pursue policies consis