EBRD affirms Bulgaria's 2024 GDP growth f'cast at 2.6%

In 2025, the EBRD expects Bulgaria's gross domestic product (GDP) to grow by a real 3%, the bank said in its May 2024 Regional Economic Prospects report.

Growth will be fueled by subsiding inflation, strong consumption and slowly recovering foreign demand. However, further delays in absorption of EU funds and reforms during political uncertainty pose risks to the forecast, the EBRD said.

"Investment growth accelerated in the second half of 2023, but the ongoing political crisis poses risks to the public investment outlook and EU funds absorption."

Bulgaria's GDP increased by 1.8% in 2023 amid subdued foreign demand and lower contributions from industry and services. Last year, the country reported a 1.9% fall in exports due to weaker EU demand, offset by a steeper import decline, the EBRD noted. Exports to non-EU European countries, including Ukraine, marked a significant drop, reflecting lower fuel and electricity export prices.

At the same time, strong wage growth and abating inflation, which was at 3.1% as of March, resulted in relatively high real wage growth in 2023, with the minimum wage additionally raised by almost 20% in 2024.

In the EBRD's region of Southeastern EU, comprising the economies of Bulgaria, Greece and Romania, GDP growth slowed to 2% in 2023 but outpaced most EU peers on the back of robust consumption. The region's economic growth is expected to speed up to 2.8% in 2024 and further to 3.1% next year, supported by accommodative fiscal policies and strong real wage growth, the EBRD said.