The Bulgarian National Bank (BNB) projects that Bulgaria’s real GDP will continue expanding steadily over the coming years. According to the central bank’s latest "Macroeconomic Forecast," economic growth is expected to reach 2.9% in 2025, followed by a moderate slowdown to 2.7% in both 2026 and 2027, levels close to those recorded in 2024.

Private consumption is anticipated to remain the primary driver of GDP growth throughout the forecast horizon. In contrast, net exports are likely to weigh on overall growth, largely due to subdued external demand for Bulgarian products and services, alongside domestic factors that are seen as constraining export activity.

The BNB forecasts a notable shift in deposit dynamics ahead of Bulgaria’s planned adoption of the euro on January 1, 2026. In the second half of 2025, annual deposit growth is expected to accelerate, driven by increased placement of available cash into bank accounts in preparation for the currency conversion. Simultaneously, Bulgaria’s eurozone accession is expected to enhance the transmission of the European Central Bank’s monetary policy to local monetary conditions.

While credit growth in the non-government sector is projected to gradually decelerate, it will remain at comparatively elevated levels over the 2025–2027 period. This trend reflects broader monetary and macroeconomic developments tied to Bulgaria’s integration into the eurozone.

On the inflation front, the BNB anticipates an uptick in 2025. Average annual inflation, based on the Harmonized Index of Consumer Prices (HICP), is expected to rise to 3.6%, up from 2.6% in 2024. This acceleration is likely to be most pronounced in the categories of food and services. Among the main inflationary pressures are higher labor costs, strong private consumption, increases in regulated prices for specific goods and services, and adjustments in excise duties, particularly on tobacco products.

In 2026, inflation is projected to remain close to 2025 levels before easing slightly to 3.3% in 2027. Throughout this period, core inflation is expected to stay elevated and continue serving as the dominant contributor to overall inflation levels.

The BNB’s updated projections reflect several adjustments compared to earlier forecasts. Notably, GDP growth expectations for 2025 and especially 2026 have been revised upward. However, the outlook for 2027 has been slightly downgraded, primarily due to changes in net export dynamics. Meanwhile, the inflation forecast for 2025 has been revised downward, taking into account lower anticipated increases in regulated prices and an updated assumption for reduced crude oil costs. For 2026 and 2027, however, inflation projections have been adjusted upward, with persistent core inflation playing a key role in the revision.