Risks to shipping in the Black Sea and the associated rise in insurance costs could affect trade and economic growth in Bulgaria and the region. It is still too early to quantify the impact, but it could weigh on growth in the short term, said Mateusz Szczurek, Director of the European Department at the International Monetary Fund (IMF). He was speaking at a briefing on the IMF’s Regional Economic Outlook for Europe, in Bangkok on Friday in response to a question from BTA about the risks following drone attacks on merchant ships in Bulgaria’s exclusive economic zone in the Black Sea.
The briefing was held during the Annual Meetings of the IMF and the World Bank Group.
Szczurek said that rising risks to maritime transport affect trade and growth prospects. Similar effects are also being observed further south, in the Middle East, he added. In its October World Economic Outlook, published earlier this week, the IMF lowered its GDP growth forecast for the Middle East and Central Asia in 2026 to a contraction of 0.3%, from the 0.7% growth in July.
Bulgaria
In response to another question from BTA, Szczurek said that, nine months after Bulgaria joined the eurozone, high inflation in the country is being driven not only by rising energy prices but also by the economy’s high energy intensity, strong domestic demand, rapid wage and credit growth, high government spending and a large government deficit.
Bulgaria is among the EU economies with the highest energy intensity, meaning that rising energy prices have a greater impact on businesses in the country. Adopting the euro generally affects the price level rather than inflation, and its impact is relatively small compared with other factors and is a one-off effect, he explained. Cooling the economy and reducing imbalances are the best ways to bring inflation back to its target level and keep it there, Szczurek said.
Helge Berger, Deputy Director of the IMF’s European Department, noted that the Fund has raised its forecast for Bulgarian economic growth in 2027 to 2.7% in its October outlook, from the previous projection of 2.5%. For 2026, the IMF lowered its forecast to 2.6%, from 2.8% in its April estimates. Growth should preferably be driven by higher productivity rather than excessive domestic demand, Berger stressed. The main data used by the IMF to prepare its forecasts were as of September 30, before commercial vessels were attacked in Bulgaria’s exclusive economic zone in the Black Sea.
Europe
Szczurek noted that there is no clear dividing line between Western and Central Europe and that the challenges need to be examined country by country. In a number of Central and Southern European countries, wage growth has outpaced productivity growth. This is undermining competitiveness and eroding the region’s established growth model, the IMF European Department director stressed.
In his opening remarks at the briefing, Szczurek said Europe’s economy continues to feel the effects of the war in Ukraine and the prolonged conflict in the Middle East. Europe had weathered the initial impact of the conflict better than expected, partly thanks to progress in the energy transition and reduced dependence on imported fossil fuels, he said. However, a prolonged period of high energy prices would continue to weigh on the economy, while uncertainty remained high.
The IMF expects economic growth in the eurozone, excluding Ireland, to reach 1.2% in 2026 before slowing to 1.1% in 2027. Central, Eastern and South-Eastern Europe is forecast to grow by 2.2% in 2026, followed by a moderate acceleration the following year. This would still be below the region’s average growth of around 3.5% over the previous two decades.
Inflation in the eurozone is expected to remain above target until 2028, and for longer in some Central and South-Eastern European countries. Under these conditions, monetary policy must remain cautious, while fiscal policy should not add to inflationary pressures, Szczurek said.
Europe should seek stronger growth through reforms that encourage innovation, business expansion and economic resilience, he said. Further integration of the single market, including markets for goods, services, labour, capital and energy, would help boost productivity and make more effective use of European savings.
Szczurek warned that protectionist measures and broad-based industrial policies could buy time but would not guarantee prosperity. The IMF’s priorities include continuing the energy transition, deepening the single market and implementing structural reforms at national level. Additional challenges for Central and South-Eastern Europe include intensifying competition in export markets, the region’s declining share of global foreign direct investment and diminishing support from EU funds.
IMF Warns Black Sea Shipping Risks Could Weigh on Bulgarian Economic Growth 2026 THE NEWS FROM BULGARIA – NEWS AGENCY 2009-2025 2026-10-16 13:31:42
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