Bulgaria is poised to become one of the fastest-growing economies in Central and Eastern Europe over the next few years, with annual GDP growth expected to exceed 3% from 2025 to 2027, according to a recent report by Allianz Trade, a leading global trade credit insurance provider.

The positive outlook is underpinned by strong domestic demand, fueled by rising household consumption and solid wage growth. Analysts predict the labor market will remain robust, with unemployment projected to fall to around 3.3% by 2027. Inflation is expected to moderate, decreasing from 3.6% in 2025 to 2.6% in 2027, remaining below the regional average.

Bulgaria is forecast to achieve 3.1% GDP growth in 2025, outperforming most CEE countries except Croatia (4%) and Poland (3.3%). The following year, growth is expected to rise to 3.2%, again ranking third in the region, and by 2027, with an anticipated 3.1% growth, Bulgaria may lead Central and Eastern Europe. Investments, particularly through EU-funded projects under the National Recovery and Resilience Plan and significant public spending on infrastructure and defense, will play a key role alongside domestic consumption.

The upcoming adoption of the euro in early 2026 is expected to further boost confidence, increase deposits and lending, and lower financing costs, stimulating both consumption and investment. Analysts also note that Bulgaria’s defense commitments could add a cumulative 2.8 percentage points to GDP by 2030, ranking the country eighth among 20 European nations in terms of additional growth from such investments.

Despite the optimistic forecasts, Allianz Trade cautions that global risks remain. Indirect pressures from weaker European demand, higher input costs, disrupted supply chains, and delayed investments could affect Bulgaria’s export-oriented companies. The report also highlights a global increase in bankruptcies, with a projected 6% rise in 2025 and another 4% in 2026, emphasizing that businesses must stay vigilant.

Kamelia Popova, manager of Euler Hermes in Bulgaria, stresses that careful monitoring of trading partners and economic trends, along with trade credit insurance, will be essential tools for companies navigating both domestic and international uncertainties.