In its latest macroeconomic forecast released on Tuesday, the Bulgarian National Bank (BNB) anticipates a 2.2% increase in Bulgaria's Gross Domestic Product (GDP) for the year 2024, compared to 1.8% in 2023.

The projected economic expansion is expected to be primarily driven by the positive influence of domestic demand, with net exports forecasted to make a negative contribution. The BNB foresees domestic demand receiving a boost from heightened private consumption due to increasing real labor incomes, a surge in investment activity, and elevated government consumption.

Looking ahead, the bank predicts real GDP growth to reach 3.3% in 2025 before moderating to 2.6% in 2026, with the trajectory largely influenced by the profile of public investment.

Regarding inflation, the BNB forecasts a deceleration to 2.3% by the end of 2024, with average annual inflation expected to stand at 3%. The service and food groups are anticipated to make the most substantial positive contributions to overall inflation by the end of 2024.

The BNB's macroeconomic outlook, prepared as of March 27, 2024, relies on projections concerning global economic activity, price trends of major commodity groups in international markets, and interest rates on the Eurozone money market as of March 7, 2024.