Bulgaria’s GDP growth is expected to reach 3.2 per cent in 2025 moderating to 2.6 per cent in 2026, contingent on sustained public investment, while euro zone accession could boost trade and private investment including FDI, the European Bank for Reconstruction and Development (EBRD) said in its September Regional Economic Prospects report, released on September 25.
The EBRD’s February forecast for Bulgaria’s GDP growth this year had been for 2.4 per cent, followed by its May forecast for 2.8 per cent.
The European Union’s finance ministers approved on July 8 the final steps that will see Bulgaria use the euro as its currency from January 1 2026.
The September report by the EBRD said that after accelerating to 2.8 per cent in 2024, real GDP growth rose further to 3.2 per cent year on year in the first half of 2025.
Despite some moderation of wage growth, private consumption was resilient, while the unemployment rate fell to 3.6 per cent by mid-year. Inflation rose to 5.3 per cent in July 2025, driven partially by an increase in the rate of value-added tax (VAT) levied on bread and restaurants to 20 per cent.
After a weak 2024, investment has also rebounded on higher public capital spending.
On the downside, exports fell in annual terms, as exports of energy products and raw materials contracted.
Government spending increased by 20 per cent in the first half of 2025, while revenues increased by just 13 per cent, raising fiscal risks.
“Nevertheless, following the approval of eurozone accession, Bulgaria is benefiting from credit rating upgrades and lower financing costs,” the EBRD said.
US tariffs on EU exports will negatively affect Bulgaria’s industrial production and exports, the report said.
Source: https://sofiaglobe.com/
