Fitch Ratings has downgraded the sovereign ratings of Bulgaria, Kazakhstan and Romania, RTTNews reported. Emerging Europe is the most vulnerable Emerging Market region to the deterioration in the global financial and economic environment owing to the presence of large current account deficits and relatively high levels of short-term external debt, according to the agency.

Bulgaria's Long-term foreign currency Issuer Default Rating was downgraded to 'BBB-' Stable Outlook from 'BBB' Negative Outlook and Long-term local currency IDR was reduced to 'BBB' Stable Outlook from 'BBB+' Negative Outlook. The downgrade reflects the increasing risk of a recession in response to a marked decline in external financing flows.

Kazakhstan's Long-term foreign currency IDR was downgraded to 'BBB-' Negative Outlook from 'BBB' Negative Outlook and Long-term local currency IDR was downgraded to 'BBB' Negative Outlook from 'BBB+' Negative Outlook.

Meanwhile, Romania's Long-term foreign currency IDR was downgraded to 'BB+' Negative Outlook from 'BBB' Negative Outlook and Long-term local currency IDR was slashed to 'BBB-' Negative Outlook from 'BBB+' Negative Outlook. The two-notch downgrade reflects concerns about the macroeconomic policy framework in Romania and its ability to avoid a severe economic and financial crisis.