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Bulgaria Economic Forecast

Bulgaria Economic Outlook

Growth slowed year on year from Q2 in Q3—in line with our panel’s forecast—due to a sharper fall in exports amid weak external demand. However, activity still outpaced the EU average thanks to stronger growth in fixed investment and consumption. Sustained disinflation, stronger wage growth year on year and lower interest rates compared to the Euro area boosted domestic demand. In Q4, GDP growth is likely dipping slightly from Q3 year on year. Downbeat activity in the broader EU economy is likely dampening exports. However, economic sentiment improved in October on recovering confidence in the industrial and construction sectors. In other news, Bulgaria will end its exemption to EU sanctions on Russian oil imports ahead of schedule from 1 January. The move should have no impact on domestic energy prices but will reinforce Bulgaria’s pro-Ukraine stance in line with the EU.

Bulgaria Inflation

In October, inflation dipped to 5.8% (September: 6.3%) on softer growth in food prices. Our panel sees price pressures more than halving in 2024 from 2023’s projection on average as monetary policy tightening transmits through the economy and commodity prices cool year on year. Potential disruptions to energy supply and a tight labor market pose upside risks.

This chart displays Economic Growth (GDP, annual variation in %) for Bulgaria from 2013 to 2022.

Bulgaria Economic Data

2018 2019 2020 2021 2022
Population (million) 7.0 7.0 6.9 6.8 6.4
GDP (USD bn) 66.3 68.9 70.2 84.0 90.2
GDP per capita (USD) 9,472 9,908 10,153 12,282 13,985
GDP (EUR bn) 56.2 61.5 61.6 71.1 85.8
GDP per capita (EUR) 8,028 8,852 8,906 10,390 13,305
GDP (BGN bn) 110 120 120 139 168
Economic Growth (Nominal GDP, ann. var. %) 7.0 9.5 0.1 15.3 20.7
Economic Growth (GDP, ann. var. %) 2.6 4.0 -4.0 7.7 3.9
Domestic Demand (ann. var. %) 5.4 4.9 0.1 7.6 6.6
Private Consumption (ann. var. %) 3.6 5.9 -0.5 8.4 3.8
Government Consumption (ann. var. %) 5.4 2.0 8.3 0.4 5.5
Fixed Investment (ann. var. %) 5.4 4.5 0.6 -8.3 6.5
Exports (G&S, ann. var. %) 1.7 4.0 -10.4 11.2 11.6
Imports (G&S, ann. var. %) 5.8 5.2 -4.3 10.7 15.0
Industrial Production (ann. var. %) 0.3 0.5 -5.9 9.8 12.7
Retail Sales (ann. var. %) 3.4 5.6 2.5 10.3 4.3
Unemployment (% of active population, aop) 6.2 5.2 6.1 5.3 4.3
Fiscal Balance (% of GDP) 1.7 2.1 -3.8 -4.0 -2.9
Public Debt (% of GDP) 22.1 20.0 24.6 23.9 22.6
Money (ann. var. of M2 %) 8.9 9.9 10.9 10.7 13.2
Inflation (CPI, ann. var. %, eop) 2.7 3.8 0.1 7.8 16.9
Inflation (CPI, ann. var. %, aop) 2.8 3.1 1.7 3.3 15.3
Inflation (PPI, ann. var. %, aop) 4.0 3.1 -1.9 15.3 37.8
Base Interest Rate (%) 0.00 0.00 0.00 0.00 1.30
Stock Market (ann. var. of SOFIX %) -12.3 -4.4 -21.2 42.0 -5.4
Exchange Rate (BGN per USD, eop) 1.71 1.74 1.60 1.72 1.83
Exchange Rate (BGN per EUR, eop) 1.96 1.96 1.96 1.96 1.96
Current Account Balance (EUR bn) 0.5 1.1 0.0 -1.2 -1.2
Current Account Balance (% of GDP) 0.9 1.9 0.0 -1.7 -1.4
Merchandise Trade Balance (EUR bn) -2.7 -2.9 -1.9 -2.9 -5.1
Merchandise Exports (EUR bn) 27.7 29.1 27.3 34.4 47.1
Merchandise Imports (EUR bn) 30.4 32.0 29.2 37.3 52.2
Merchandise Exports (ann. var. %) 2.9 5.0 -6.3 26.2 37.0
Merchandise Imports (ann. var. %) 9.8 5.2 -8.8 27.7 40.0
Foreign Direct Investment (EUR bn) 1.0 1.6 2.8 1.7 2.3
International Reserves (EUR bn) 25.1 24.8 30.9 34.6 38.4
International Reserves (months of imports) 9.9 9.3 12.7 11.1 8.8
External Debt (EUR bn) 37.2 37.7 39.0 41.3 44.2
External Debt (% of GDP) 66.2 61.3 63.3 58.1 51.6

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