The Bulgarian National Bank (BNB) expects a slowdown in economic growth over the next two years, while inflation is projected to rise sharply in 2026, according to its latest macroeconomic forecast.
The central bank attributes the outlook mainly to higher energy prices driven by the ongoing conflict in the Middle East, combined with persistent domestic price pressures. At the same time, it anticipates a gradual recovery in external demand and a modest acceleration in growth toward 2028. The forecast is based on data prepared as of May 27, 2026.
BNB projects real GDP growth of 2.8% in 2026, followed by 2.7% in 2027, with a rebound to 2.9% expected in 2028. The institution notes that in 2026, all components of domestic demand are likely to weaken compared to 2025, although this will be partially offset by a reduced negative impact from net exports once temporary export constraints ease.
Private consumption is expected to remain the main driver of growth throughout the forecast horizon, but its momentum is projected to slow in the second half of 2026 and in 2027. The central bank links this to rising inflation, which will erode real household incomes.
Investment activity is forecast to increase slightly in 2026, followed by stronger growth in 2027. Private investment and expected inflows into the defense industry are identified as key contributors, while public investment is set to decline.
