Fitch: Eastern European sovereigns face balanced risks in ’25

Eastern European sovereigns are entering 2025 with a neutral credit outlook as improved growth prospects offset weaker public finances and high geopolitical risks, according to Fitch Ratings’ Eastern Europe Sovereign Outlook.

Central and Eastern Europe (CEE) countries are expected to pursue fiscal consolidation, but government deficits and debt levels will remain above pre-pandemic levels.

Growth momentum in the Caucasus and Central Asia (CCA) is forecast to stay strong, though vulnerabilities like foreign-currency debt expose the region to financial market volatility.

Fitch highlighted Bulgaria (BBB) and Serbia (BB+) as the only sovereigns with positive outlooks, citing euro adoption progress and robust investment-driven growth, respectively. Hungary (BBB) holds the region’s sole negative outlook due to concerns over fiscal policy and credibility.

Ukraine remains at Restricted Default (RD) following its debt restructuring efforts, with ongoing risks tied to geopolitical uncertainty and global economic pressures.

Attribution: Fitch

Subediting: M. S. Salama