site.btaCentral Bank Revises Upward Its Economic Growth Forecast for 2025-2027

The Bulgarian National Bank (BNB) has revised upward its forecast for Bulgaria’s economic growth over the 2025–2027 period compared with its June 2025 outlook, according to the central bank’s regular publication Macroeconomic Forecast, released on Tuesday and based on data available as of December 2025.

The current forecast is the first prepared in line with the approved schedule and framework for macroeconomic projections used by the national central banks of the Eurosystem and experts from the European Central Bank (ECB).

BNB projects that real GDP growth in Bulgaria over 2025-2027 will remain close to its 2024 level, reaching 3.2% in 2025 and then easing slightly to 3.1% in both 2026 and 2027. In its June 26, 2025 forecast, the central bank expected real GDP growth of 2.9% in 2025 and 2.7% in 2026 and 2027.

In its December forecast, BNB notes that private consumption will continue to make the main contribution to GDP growth, while relatively weak external demand for Bulgarian goods and services and country-specific factors are expected to result in a negative contribution from net exports over most of the forecast horizon. 

As a result of continued intensive deposits of free cash balances in the banking system ahead of their automatic conversion into euros following Bulgaria’s accession to the euro area at the beginning of 2026, BNB expects annual growth in deposits of the non-government sector to accelerate toward the end of 2025, followed by a subsequent slowdown. At the same time, euro area membership is expected to strengthen the transmission of the ECB’s monetary policy to domestic monetary conditions. In 2026 and 2027, annual credit growth to the non-government sector is projected to slow but remain relatively high.

Average annual inflation, measured by the Harmonised Index of Consumer Prices (HICP), is forecast to accelerate to 3.6% in 2025 from 2.6% in 2024, with food and services expected to make the largest contributions. The main pro-inflationary factors for Bulgaria remain domestically driven, including rising labour costs and strong private consumption growth. In 2026, average annual inflation is expected to remain broadly unchanged at 3.5% before easing to 3.2% in 2027. Core inflation is projected to stay high throughout the forecast horizon and to continue contributing most to overall inflation. The forecast for average annual inflation in 2025 is unchanged from June, while projections for 2026 and 2027 have been slightly lowered due to new technical assumptions regarding international oil and food prices.

The inflation outlook has been revised toward stronger consumer price growth at the end of 2025 (by 0.1 percentage points), in line with the upward revision to private consumption and wage growth, while average annual inflation remains unchanged compared with the June 2025 forecast. The inflation forecast for the end of 2026 has been lowered by 0.2 percentage points and average annual inflation by 0.1 percentage points, mainly due to technical assumptions about oil and food prices on international markets. For 2027, the end-period inflation forecast is unchanged, while average annual inflation is expected to be 0.1 percentage points lower.

BNB explains that the main factors behind the revisions to GDP growth and inflation compared with the June 2025 macroeconomic forecast are related to technical and methodological changes stemming from the alignment of the forecasting process with that of Eurosystem national central banks, revisions to historical GDP data carried out by the National Statistical Institute (NSI) in October 2025, newly available economic data, and changes in assumptions about the external environment. Due to the methodological changes introduced, the current forecast is not directly comparable with the June outlook, BNB notes.