site.btaIMF Mission Head Sees Stronger Growth Outlook for Bulgaria, Stresses Need for Continued Reforms After Eurozone Entry

The head of an International Monetary Fund (IMF) mission to Bulgaria, Fabian Bornhorst, expressed optimism about higher economic growth for Bulgaria but emphasized that reforms must continue even after joining the eurozone. “Bulgaria is in a strong position, as it stands on the threshold of adopting the euro,” Bornhorst said in a special interview with BTA, noting that domestic demand - driven by rising incomes and increased employment - is currently the main engine of growth.

According to him, investment is once again increasing, which is helping to create a more favorable economic outlook despite ongoing external challenges.

The IMF expects Bulgaria’s economy to grow by around 3% this year and next, an upward revision compared to the Fund’s April projections. Bornhorst underscored that structural reforms must continue beyond eurozone accession.

Bornhorst led an IMF mission that visited Bulgaria from September 10 to 23, during which the team held meetings with experts from the Ministry of Finance, the Bulgarian National Bank, and other state institutions, including the Parliamentary Budget and Finance Committee, as well as representatives from the private sector and non-governmental organizations.

Regarding Bulgaria’s readiness for the eurozone, Bornhorst stated that the country is well-prepared thanks to stable macroeconomic policies and a long-standing currency board. He added that adopting the euro will bring institutional stability and increased confidence in the economy. He emphasized that reforms must not stop after joining the monetary union, and that policy continuity and predictability are key to sustainable growth.

Among the Fund’s recommendations are modernizing the pension system, improving public finance management, implementing reforms to boost productivity through investments in education and digital skills, as well as strengthening institutions and infrastructure. Bornhorst noted that the labor market faces demographic challenges and recommended encouraging migration and the return of Bulgarians abroad.

However, Bornhorst said he does not recommend freezing the minimum wage but rather ending the payments linked to it.

Regarding the housing market and banking sector, he explained that rising prices are due to increased demand related to higher incomes and migration flows, while loans remain accessible and indebtedness is relatively low.

In conclusion, Bornhorst expressed confidence that “the convergence of incomes (to European levels) has accelerated” and that with the adoption of the euro, Bulgaria will continue to develop, but success depends on ongoing reforms and fiscal discipline.