EBRD forecast: Bulgaria set for 2.7% economic growth in 2026

Bulgaria’s economic growth is projected at 2.7 per cent in 2026 and 2.5 per cent in 2027, the European Bank for Reconstruction and Development (EBRD) said in its latest Regional Economic Prospects report, released on September 24.

Real GDP expanded at a rate of 2.8 per cent year on year in the first half of 2026 as domestic consumption and investment demand remained resilient, manufacturing output moved into positive territory after a significant contraction in 2025, and services and construction continued to grow robustly, the EBRD said.

Bulgaria’s exports fell significantly in the first quarter, recovering in part by mid-year, the report said.

Harmonised inflation reached 6.3 per cent in May 2026, driven by higher energy prices, while food inflation had declined by July 2026.

“The fiscal position has deteriorated considerably in the year to date, with the budget targeting a general government deficit of 5.7 per cent of GDP in 2026,” the EBRD said.

With Bulgaria subject to the EU’s excessive deficit procedure since July 2026, fiscal consolidation is expected to be a key policy priority over the medium term, it said.

Following earlier setbacks, the absorption of RRF funds has been prioritised “and Bulgaria should be able to mop up a significant share of its allocation by year end,” the report said.

The key downside risk to growth is the impact of the required fiscal consolidation on consumer and business confidence.

(Photo: Interior Ministry)