Economic growth inches down in Q4

Economy broadly maintains momentum at year-end: Bulgaria's GDP expanded 3.0% in working-day and seasonally adjusted year-on-year terms in Q4, marginally down from a 3.1% expansion in the previous quarter. Still, Q4's reading was the softest since Q1 2024. In seasonally adjusted quarter-on-quarter terms, GDP increased 0.8% in Q4, following 0.7% growth in the prior quarter. In 2025 as a whole, GDP rose 3.1%, slightly below 2024’s 3.4% expansion but broadly in line with its prior-decade average.

Domestic demand remains healthy in Q4: Compared to the prior period's data, the reading for government consumption worsened in Q4 (+7.5% in seasonally adjusted year-on-year terms vs +8.4% in Q3). In contrast, readings picked up for private consumption (+8.4% vs +8.2% in Q3), fixed investment (+12.4% vs +10.3% in Q3), exports of goods and services (+0.2% vs -4.3% in Q3) and imports of goods and services (+11.1% vs +4.0% in Q3).

Panelist insight: EIU analysts said: “Bulgaria recorded one of the strongest growth rates in the EU in the fourth quarter, and the economy is expected to remain among the bloc's top performers in 2026-30, supported by solid real wage gains and rising investment. […] Investment momentum is expected to strengthen further, although political instability remains a key downside risk. Investor confidence will be bolstered by Bulgaria's full accession to the Schengen area in early 2025 and its entry into the euro area in January 2026. Strong credit growth will provide additional support to both investment and private consumption. Substantial EU funding is also available, but tight implementation deadlines heighten the risks posed by political uncertainty.”

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