The World Bank kept its forecast for Bulgaria’s economic growth in 2026 at 2.6% but lowered its projection for 2027, according to the institution’s latest Europe and Central Asia Economic Update, released on Tuesday. The report focuses in particular on how artificial intelligence could boost productivity and help offset demographic pressures in the region.
Following growth of 3.1% in 2025, the World Bank expects Bulgaria’s gross domestic product to expand by 2.6% in both 2026 and 2027 before growth edges up to 2.7% in 2028.
Compared with its spring forecast, the projection for 2026 is unchanged, while the 2027 estimate has been cut by 0.3 percentage points from 2.9% to 2.6%. In June, the World Bank had projected growth of 2.6% in 2026 and 2.9% in 2027.
Strong domestic demand, supported by rising real wages, credit growth and looser fiscal policy, has sustained economic activity in Bulgaria, but has also fuelled inflation and significantly widened the budget deficit, the report says.
The World Bank expects the deficit to rise to 5.3% of GDP in 2026 from 3% last year, citing rapid increases in social spending, higher municipal investment and greater energy subsidies.
Expected fiscal tightening and slower real wage growth are projected to keep economic growth at around 2.6% a year in 2027-2028, following strong increases in consumption and government spending.
For Europe and Central Asia as a whole, the World Bank expects growth to slow to 2.2% in 2026 from 2.6% in 2025, before gradually accelerating to 2.4% in 2027 and 2.6% in 2028. Excluding Russia, growth is expected at 3% this year, 3.4% next year and 3.7% in 2028. The Bank said higher energy prices, heightened uncertainty and weaker growth in trading partners were weighing on the region.
The report does not provide separate numerical forecasts for the European Union or the euro area. It does, however, identify sluggish EU growth as one of the factors weighing on exports and industrial activity in Europe and Central Asia. Some strengthening of EU economic activity is expected in 2027-2028, which should support growth in Central Europe.
Bulgaria ranks among the top three countries in Europe and Central Asia in data-centre capacity, with 2.89 MW per million inhabitants. Only Poland, with 6.62 MW, and Russia, with 3.82 MW per million inhabitants, rank higher in the region. The figures refer to 2025 or the latest year for which data are available.
Bulgaria is one of only three countries in Europe and Central Asia where capacity exceeds 1 MW per million inhabitants. The regional average is 2.1 MW, far below the 31.6 MW recorded in high-income countries outside the region.
The World Bank identifies insufficient computing infrastructure as one of the main constraints on widespread AI adoption. The region has many of the prerequisites for AI, including almost universal mobile coverage, favourable energy costs and strong technical talent, but adoption is being held back by gaps in skills, data infrastructure and computing capacity.
Bulgaria’s relatively strong position in data-centre capacity has yet to translate into widespread use of AI by businesses. In 2025, 8.5% of Bulgarian enterprises with at least 10 employees used at least one AI technology, compared with an EU average of 20%.
AI-related activity is also highly concentrated in the capital. More than 90% of job advertisements in Bulgaria requiring AI skills were posted in the Sofia region, according to the report, raising the risk that new technologies could deepen existing regional disparities.
The business services sector, which accounts for a significant share of Bulgaria’s highly skilled employment, is among those most exposed to changes brought by generative AI. The World Bank has so far found no evidence of widespread worker displacement, but expects routine tasks to be automated and employees increasingly redirected towards supervision, quality control and more complex problem-solving.
World Bank Chief Economist for Europe and Central Asia Ivailo Izvorski said the principal risk over the next decade was likely to be too little AI adoption and adaptation across the region rather than too much. The Bank said better skills and much larger inflows of private capital would be key to realising AI’s potential.
World Bank Keeps Bulgaria’s 2026 Growth Forecast at 2.6%, Cuts 2027 Outlook THE NEWS FROM BULGARIA – NEWS AGENCY 2009-2025 2026-10-06 15:28:04
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BULGARIA NEWS – NEWS AGENCY 2009–2026 2026-10-06 15:28:04
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