Bulgaria's households are expected to continue increasing their savings, with a focus on deposits in euros, as the average interest rates on euro deposits remain more attractive than those in leva. According to a survey by the Ministry of Finance among financial intermediaries, household deposits will grow at a faster pace compared to corporate deposits. Bank lending is also projected to maintain steady growth, with household loans—particularly long-term ones—being a key factor in this trend.

At the end of 2024, household loans experienced significant growth, reaching a 20.8% annual increase by December, and this acceleration continued into January. Financial intermediaries, including commercial banks, investment intermediaries, and pension insurance companies, assessed the economic situation in the final quarter of 2024 as satisfactory. While the majority expressed satisfaction, around 40% of investment intermediaries viewed the economic environment as unsatisfactory. Expectations for inflation remain relatively stable, with a slight increase predicted for the first quarter of 2025.

Inflation during the fourth quarter of 2024 saw an uptick, reaching 2.1% at the year’s end, compared to 1.5% in September. This was mainly driven by a reduction in the negative impact of energy goods. Core inflation also saw a slight acceleration, though the overall economic outlook from financial intermediaries remains balanced. Over 70% of respondents do not anticipate any significant changes in employment levels over the next year, marking a shift from previous surveys where expectations of employment changes were higher.

As for the country’s deposit market, financial intermediaries expect interest rates on deposits to remain stable, while dollar deposits have seen a notable decrease for both households and businesses. Household deposits in leva and euros showed little change, but business deposits in leva with longer-term maturities (over 1 and 2 years) increased, along with euro deposits with maturities extending beyond two years.