EU autumn economic forecast raises Bulgaria 2025 growth forecast to 3.0%
The European Commission’s autumn forecast for the EU economy, released on May 19, projected Bulgaria’s economic growth this year at three per cent, significantly higher than the two per cent figure projected in the spring forecast.
The Commission also raised its growth estimate for Bulgaria’s economy in 2026 to 2.7 per cent from 2.1 per cent projected in the spring forecast, released in May.
In its autumn forecast, the EC attributed the higher projections to accelerated investment, boosted by increased absorption of EU funds, specifically under the Recovery and Resilience Facility.
Last year, Bulgaria’s economy grew by 3.4 per cent, driven by private and public consumption. However, private consumption growth is expected to moderate in line with slowing growth of wages and social transfers, the EC said.
Private investment is forecast to continue supporting growth as business confidence improves, in the context of the euro adoption on January 1, the Commission said.
Regarding inflation, the EC said that it expected this year’s figure to reach 3.5 per cent, following an increase in VAT rates on bread and restaurant meals, higher excise duties on tobacco, and an increase of administered prices of gas, heating and electricity, as well as the surge in food prices due to higher import prices.
In 2026, inflation is expected to moderate to 2.9 per cent as the effects of the administered price hikes fade, but inflation in services and food is expected to remain elevated, while energy prices remain stable, in line with commodity prices, the EC said.
In its spring forecast, the Commission had projected 3.5 per cent inflation this year and 1.8 per cent in 2026.
“This better-than-expected performance was initially due to a surge in exports ahead of anticipated tariff increases, but investment in equipment and intangible assets also performed more strongly than expected,” the Commission said.
The upward revision in Bulgaria’s macroeconomic outlook was in line with improved expectations for the EU as a whole and the euro area, which are now projected to grow by 1.4 per cent and 1.3 per cent, respectively.
In 2026, growth was projected to remain largely unchanged at 1.2 per cent in the euro zone and 1.4 per cent in the EU as a whole.
The autumn forecast noted that while the overall level of uncertainty appeared lower than in spring, continuous shifts in trade policy might result in weakening economic sentiment and increased volatility in global financial markets.
Other risks included a possible re-pricing in equity markets, namely a reassessment of prospects in the US technological sector, continued challenges to the independence of the US Federal Reserve, and concerns about US fiscal sustainability in the medium to long term, the forecast said.
“Even in an adverse environment, the EU’s economy has continued to grow. Now, given the challenging external context, the EU must take resolute action to unlock domestic growth,” EU commissioner for economy Valdis Dombrovskis said.
(Photo: Steve Ford/sxc.hu)
