site.btaSolid Growth Persists in Bulgarian Economy in Q2 - United Bulgarian Bank

Despite more moderate expectations, the solid growth persisted in the Bulgarian economy in the second quarter of 2025 and it expanded by 3.1% year-on-year, United Bulgarian Bank (UBB) Chief Economist Emil Kalchev said in an analysis published earlier this week. He warns though that a significant systemic growth in wages, which is not supported by an increase in labor productivity, fuels inflation, hampers competitiveness and contributes to an increase in the budget deficit

Economic activity during Q2 was mainly fueled by final consumption, which registered real growth of 6.5%, accounting for 80% of GDP. Investments in Q2 increased by 6.7%, but represented only 19.1% of GDP. Exports, however, continued declining, reaching 4.9% year-on-year. Kalchev explained that a slight decrease of 0.6% of imports was caused by a drop in mineral fuels imports and a drop in industry.  

He added that the average monthly wage grew by 11.9% June compared to June 2024, slightly increasing from the first quarter of 2025, despite the surging annual inflation and 3.7% unemployment in July 2025.  The average wage in June increased year-on-year in both the public sector (13.7%) and the private sector (11.3%). The culture sector registered the largest increase, up by 21%, followed by the administration, up by 16.7%, and the education sector, up by 16.3%. 

He noted that wage growth was stimulated by government policies to raise the minimum and public sector wages, deal with worker shortages and converge economic standards with the Eurozone members as Bulgaria adopts the Euro.  

Consumer inflation, measured by the national methodology, rose to 5.3% from 4.4% in June. "A similar trend was observed in core inflation (excluding food and fuels), which also slightly increased to 3.5%,” noted UBB’s Chief Economist.