site.btaFinance Ministry Forecasts Economic Growth, Accelerating Inflation in 2025

Bulgaria's economic growth will reach 3% in 2025, and the average annual inflation will rise to 3.6%, according to the Ministry of Finance's spring macroeconomic forecast released on Wednesday.

Expectations for gross domestic product (GDP) growth and inflation for the current year have been revised upwards from the Finance Ministry's autumn macroeconomic forecast by 0.2 percentage points and 1.2 percentage points, respectively. By comparison, the autumn forecast expected GDP growth of 2.8% and annual average inflation (on the harmonized index of consumer prices) of 2.4% this year.

The Ministry of Finance lowered its expectations for economic growth in the coming 2026 but raised its forecast for the 2027-2028 period.

According to the spring forecast, economic growth is expected to slow to 2.5% in 2026, to 2.4% in 2027 and to 2.2% in 2028. By comparison, in the autumn forecast the expected growth rates for these periods were 3%, 2% and 2% respectively.

According to the forecast, GDP growth in 2025 will be supported by public spending, while the slowdown next year will be caused by a reduction in public investment. The largest contributor to inflation in 2025 will be the prices of services, followed by food. Energy commodities will make a negative contribution given the expected decline in international crude oil prices.

In terms of average annual inflation, a slowdown to 2.2% is expected in 2026, 2.1% in 2027 and 2% in 2028. The forecast for the periods is similar to the expectations in the autumn release for average annual inflation, namely 2.3%, 2.2% and 2% over the three years.

Employment rates are expected to continue to rise, albeit at a slower pace. The unemployment rate is expected to undergo minimal changes despite the projected increase in employment. The unemployment rate for 2025 is expected to decline to 4.1% from 4.2% in 2024 and to decline marginally to 4% in 2028.