EBRD sees Bulgaria’s economy growing 2.4% in 2025
Bulgaria’s economy is forecast to grow by 2.4 per cent in 2025, amid uncertain outlook for investment and foreign demand, the European Bank for Reconstruction and Development (EBRD) said in its latest Regional Economic Prospects report, released on February 27.
This is down from the figure in the EBRD’s September 2024 report, when it forecast 2.9 per cent economic growth for Bulgaria in 2025.
Bulgaria’s GDP growth is expected to inch up to 2.8 per cent in 2026 on improving EU funds absorption and further regional integration.
Real GDP growth reached an estimated 2.3 per cent in 2024, driven mostly by domestic demand, the report said.
Real wage growth averaged 13 per cent year on year in the first three quarters, supporting private consumption.
Positive dynamics in retail sales towards the end of 2024 suggest a robust carry-over effect in early 2025.
After strong growth in 2023, investment contracted in real terms in 2024, although construction output remained resilient, in contrast with the trends observed in regional peers.
Reflecting this, retail loans grew by 19 per cent last year, the report said.
On the downside, weak foreign demand translated into a further decline of industrial output, although Bulgaria’s entry into the Schengen border-free area could boost exports from 2025 onwards, it said.
Inflation stabilised at two per cent by the fourth quarter but could pick up slightly in 2025.
Fiscal risks related to the euro zone accession increased as the government is expected to propose a budget envisaging a deficit of three per cent of GDP and a significant increase in expenditures that needs to be met by better revenue collection in the absence of other measures.
While a new government has been formed, Recovery and Resilience Facility implementation remains heavily delayed, the EBRD said.
(Photo: Clive Leviev-Sawyer)
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