The conflict in the Middle East poses risks to the Bulgarian economy, according to an assessment by the Bulgarian National Bank (BNB). The central bank is analyzing the potential macroeconomic effects of the war in the region, publishing a report on its website.
The BNB has developed three scenarios, based on the methodology of the European Central Bank (ECB). The baseline scenario predicts an acceleration of inflation to 3.7% in 2026, followed by a slowdown to 3.2% in 2027 and 2028. Real GDP growth is expected to be 3% in 2026, slowing to 2.9% in 2027 and 2.8% in 2028.
Two negative scenarios have also been developed, reflecting the possible effects of shocks on energy prices. In an adverse scenario, a temporary disruption in the supply of oil and natural gas is assumed. Inflation rises and GDP growth slows. In a severely adverse scenario, stronger inflationary pressure and a significant slowdown in the economy are expected.
According to the BNB, the negative scenarios do not take into account potential monetary and fiscal policy measures, but are intended to illustrate the possible mechanisms of the impact of external shocks on the Bulgarian economy.