Bulgaria’s Finance Ministry on Monday raised its 2026 GDP growth forecast to 3% and its average annual inflation forecast to 4.8%.
The figures appear in the Ministry’s Autumn Macroeconomic Forecast, published on its website. Its spring forecast projected GDP growth of 2.6% and average annual inflation of 4.3% for 2026.
The Ministry now expects GDP to grow by 2.5% in 2027 and 2.4% in both 2028 and 2029. The spring forecast projected growth of 2.5% in 2027 and 2028 and 2.6% in 2029.
Average annual inflation is expected to ease to 4% in 2027, compared with the spring projection of 3.8%. The Ministry attributed its higher inflation estimates mainly to rising fuel prices. It forecasts inflation of 2.6% in 2028 and 2.4% in 2029, against spring projections of 2.5% for each year.
Employment is expected to rise by 0.5% in 2026 and 0.2% in 2027. The unemployment rate is forecast to remain around its current level of 3.4% over the forecast period.
Nominal growth in compensation per employee reached 7.1% in the first half of 2026. The Ministry expects it to average 8.5% for the full year before slowing to 6.2% in 2027.
The conflict in the Middle East remains a leading factor shaping external conditions, the Ministry said. Its initial assumptions were that hostilities and the blockage of the Strait of Hormuz would continue until mid-2026, followed by a gradual normalization. After a temporary easing in late June and early July, however, the conflict intensified again, adding to price pressures.
The current forecast expects international oil and natural gas prices to normalize gradually in 2027. The high prices already reached, together with more restrictive monetary policy, are expected to weigh on economic activity, particularly in Europe.
The Middle East crisis remains the main risk to the forecast. A further escalation of geopolitical tensions could keep energy prices high for longer. The Ministry has therefore examined an alternative scenario with higher international energy prices and weaker external demand than assumed in its baseline forecast.
Under that scenario, inflation in Bulgaria would be 0.6 percentage points higher than the baseline projection in 2026 and 0.3 percentage points higher in each of 2027 and 2028. Uncertainty abroad and more expensive raw materials would also constrain investment in Bulgaria, with the effect emerging later than for other components of final demand. Real GDP growth would be 0.1 percentage points below the baseline projection in both 2027 and 2028.
Finance Ministry Raises 2026 Growth Forecast to 3%, Inflation Forecast to 4.8% THE NEWS FROM BULGARIA – NEWS AGENCY 2009-2025 2026-09-28 17:56:30
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BULGARIA NEWS – NEWS AGENCY 2009–2026 2026-09-28 17:56:30