site.btaBulgarian Economy Expected to Grow by 2.9% in 2025, Inflation to Reach 3.8%, BNB Forecasts

The Bulgarian National Bank (BNB) has revised upward its projections for Bulgaria's economic growth and inflation in its latest Macroeconomic Forecast, published on Friday. The Bulgarian economy is expected to grow by 2.9% in 2025 and 2.7% in 2026, marking upward revisions of 0.1 and 0.5 percentage points, respectively, compared to the March forecast.

The upward revision for 2025 is attributed to stronger domestic demand, particularly private consumption, and a more positive contribution from inventory changes, despite ongoing economic and geopolitical uncertainty.

BNB also raised its inflation forecast, projecting harmonized consumer price inflation (HICP) to reach 3.8% in both 2025 and 2026, up from 3.5% and 2.5% in the previous forecast. For 2027, inflation is expected at 3.0%, a 0.4 percentage point increase.

The annual growth of deposits in the non-government sector is expected to accelerate to 15.7% by end-2025, driven by an anticipated rise in deposits ahead of Bulgaria’s planned adoption of the euro, as households and businesses prepare to convert their savings.

The revised GDP growth outlook for 2026 and 2027 reflects changes in the contribution of net exports, influenced by updated assumptions regarding foreign demand for Bulgarian goods and services, as well as a revised method of accounting for the import component of public investment in military equipment.

The inflation forecast for end-2025 was revised due to higher expected increases in services and food prices, aligned with stronger private consumption and wage growth. The 2026 inflation revision stems from projected higher core inflation and, to a lesser extent, stronger increases in food and regulated prices. The 2027 revision covers all major HICP subcomponents.