The Bulgarian Ministry of Finance expects wage growth to reach 9.1% in 2025, largely driven by the recent increase in the minimum wage and wage hikes in certain public sector roles. However, wage growth is anticipated to slow significantly in the coming years, with projections indicating a drop to 5% in 2026, accompanied by an expected acceleration in real productivity growth. Over the period of 2027–2028, the rate of nominal wage growth is forecast to further decelerate to 4% in 2027 and 3.5% in 2028, as outlined in the National Medium-Term Fiscal and Structural Plan.

The same plan forecasts that inflation will ease, with average annual inflation expected to fall to 2.4% in 2025. The primary contributor to inflation will be rising service prices, driven by increased labor costs. Inflation is predicted to continue slowing to 2% by 2028, mainly due to a decline in international prices.

Economic growth in Bulgaria is projected to accelerate to 2.8% in 2025, supported by public spending. By 2026, the expected improvement in external demand will boost export growth, leading to a GDP growth rate of 3%. However, between 2027 and 2028, GDP growth is anticipated to slow to 2%, as the impact of investments from the National Recovery and Resilience Plan diminishes, and household consumption and export growth also moderate in response to lower incomes and external demand.

Employment growth is expected to be modest, with a 0.5% increase in 2025. Given the already low unemployment rates in Bulgaria, most of the new jobs will be filled by people who had previously been outside the labor force. The unemployment rate is projected to drop to 4.1%, and remain around 4% for the next few years, until 2028. Due to unfavorable demographic trends and limited opportunities for increasing the labor supply, employment growth is expected to slow between 2026 and 2028.

Regarding pensions, the Plan outlines continued reforms, including gradually raising the required length of service and retirement age for all workers. Pension updates will continue to follow the rule established under Article 100 of the Social Security Code, which links pension increases to both 50% of the rise in insured income and 50% of the previous year’s consumer price index.