In a new report released on October 7, the World Bank has increased its forecast for Bulgaria’s GDP growth in 2025 by a percentage point compared with its previous report in June 2025.
The World Bank’s Europe and Central Asia Economic Updated Outlook for autumn 2025 shows it projecting Bulgaria’s GDP growth this year as three per cent, up by a percentage point compared with its projection in June.
For 2026, the Bank sees Bulgaria’s GDP growth at 2.9 per cent and for 2027 at 3.1 per cent, in both cases up by 0.7 percentage points compared with the projection in the June 2025 report.
The Bank’s autumn report said that economic growth in Europe and Central Asia (ECA) has slowed but the region has remained resilient amid continued global and regional challenges.
Regional gross domestic product is likely to grow by 2.4 percent in real terms this year, down from 3.7 percent in 2024, because of a weaker pace of expansion in the Russian Federation.
Excluding Russia, which accounts for about 40 per cent of the region’s output, growth is likely to remain little changed at about 3.3 percent this year and next. Growth in Türkiye and Poland is set to strengthen to 3.5 percent and 3.2 percent, respectively, supported by strong consumer demand and robust investment growth.
Private consumption remains the main driver of growth in ECA, although its pace is moderating as real wage gains ease and job creation slows, the report said.
It said that higher food prices have pushed up inflation.
Median annual inflation rose to 4.9 percent by August from 3.8 percent a year ago. Hikes in administered prices also contributed. Fiscal consolidations across ECA have mostly been delayed.
In more than half of the countries, fiscal deficits are set to rise this year due to higher public investment, interest costs, social spending, and defence outlays.
Growth in ECA is expected to pick up only modestly to 2.6 percent on average in 2026–27.
In Russia, growth is likely to weaken further to 0.8 percent next year before picking up slightly to 1 percent in 2027.
In contrast, economic expansion in Türkiye is expected to continue gaining momentum, with growth reaching 4.4 percent in 2027.
Private consumption, supported by wages, remittances, and social transfers; continued infrastructure spending; and a gradual recovery in trade outside Russia are likely to sustain growth across the region.
Nonetheless, there are substantial downside risks, the World Bank said.
Slow progress in advancing structural reforms has limited the scope for productivity growth to rebound and convergence to high income status to accelerate. Trade and geopolitical tensions and persistent inflation pressures have also heightened the region’s vulnerabilities.
Weakening reform momentum and slowing productivity growth resulted in positive but modest job creation in the ECA region after the 2008 Global Financial Crisis, the report said.
Source:https://sofiaglobe.com/
