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Nov 5, 2025
The European Commission (EC) has released its Autumn 2025 Economic Forecast, delivering mixed signals for Bulgaria's economy. While the EC has upgraded its GDP growth forecast for the current year, it projects a slowdown in the coming years due to weakening domestic demand and fiscal pressures.
1. GDP Growth: Revised Upwards for 2025
The EC revised its growth estimate for Bulgaria's Gross Domestic Product (GDP) upwards, indicating a stronger-than-expected performance in the first half of the year:
2025 Forecast: Revised to 3.0% (a significant jump from the 2.0% forecasted in the spring). Driving Force: This acceleration was largely attributed to increased investment, particularly the successful absorption of funds from the EU's Recovery and Resilience Facility (RRF) ([1]).
2. Inflation and Consumer Prices
Inflation is projected to stabilize but remains driven by specific public policy changes:
2025 Inflation (HICP): Expected to reach 3.5%. This rate is higher than many EU peers, largely due to VAT hikes on bread and restaurant services, and increased excise duties on tobacco and regulated energy prices (Source [1]). Labor Market: The labor market remains stable, with the unemployment rate expected to decline to 3.5% in 2025 ([1]).
3. Fiscal Challenges and Future Slowdown
The EC also highlighted structural concerns that will affect future growth:
Public Finances: The budget deficit is expected to remain at 3.0% of GDP in 2025, driven by automatic social spending increases and higher defense costs. Slowing Demand: Consumption and investment are expected to slow down in the second half of 2025 and into 2026, leading to a projected GDP growth decline to 2.7% in 2026 (Source [1]). Rising Debt: The national debt-to-GDP ratio is forecast to increase significantly from 23.8% in 2024 to 28.5% in 2025, reflecting debt refinancing and capital injections into state-owned enterprises ([1]).
Sources Used
[1] European Commission Autumn Economic Forecast 2025: Official report from the EC detailing the upward revision for 2025 GDP, inflation drivers, and future fiscal projections.
[2] BTA Report: Article summarizing the EC's official Autumn 2025 Economic Forecast.