Bulgaria’s GDP growth is influenced by a number of factors
The European Bank EBRD has published a forecast for Bulgaria’s GDP in 2025. The country’s economy should grow by 2.4%. Analysts have lowered their expectations amid investment uncertainty.
In 2026, GDP is likely to reach 2.8%. The surge is due to the support of EU funds and the country’s integration into regional processes. In the current period, Bulgaria is experiencing a decline in external demand and instability in the investment plan. As for the previous periods, the situation was as follows:
– GDP rise in 2024 was 2.3%.
– in 2023, the economy grew by 1.9%;
– the main growth driver in 2024 was the expansion of domestic demand;
– the wage growth rate in the last period was 13%.
The increase in wages had a positive impact on private consumption. Analysts expect this trend to continue this year. This also applies to the rise in retail sales.
In 2024, the investment sector was less successful than it was in 2023. At the same time, the construction market showed good resilience. This contributed to higher demand for retail loans. The number of loans granted rose by 19%.
The limiting factor for the local industry is low external demand. However, experts hope that the situation will soon change due to Bulgaria’s accession to the Schengen area. Such changes could provide an incentive to boost exports in the coming years.
As for inflation, it stood at 2% at the end of 2024. Experts expect its rate to increase in the current period. At the same time, fiscal risks have risen due to the country’s entry into the eurozone.
In order to stabilise the situation, the government intends to strengthen the budget. The key point is expected to be to keep the deficit at 3%. At the same time, the authorities plan to significantly raise spending. Achieving these goals will require tighter control over revenues.
Regional overview
EBRD analysts also presented an analysis of the EU’s South-East region, which includes Bulgaria, Romania, and Greece. According to the data, GDP grew by 1.5% in 2024 and 2.3% in 2023. The slowdown in Romania was a key reason for the regional economy’s slowdown last year. GDP is expected to grow to 2.1% in 2025 and 2.4% in 2026.
The region’s economy remains stable thanks to rising domestic demand. However, experts are concerned about the uncertainty of external demand. In addition, the region’s economies need reforms to improve their position.
