The International Monetary Fund has cut its 2026 growth forecast for Bulgaria's economy and raised its 2027 forecast, compared with its April estimate. The change is in the October edition of the World Economic Outlook report, which the IMF published today.
The fund gives no specific figures for Bulgaria. It compares with April because it makes detailed forecasts for all countries twice a year, in spring and autumn. Its summer and winter updates give numbers only for the biggest economies.
Forecasts for this year are higher for both the eurozone and the world. The new report says the eurozone will grow by 1.1% in 2026, against 0.9% in the July forecast. The world economy will grow by 3.1%, against 3.0% in July.
Bulgaria is one of six eurozone countries without July estimates whose 2026 forecast is lower than in April. Austria, Croatia, Lithuania, Luxembourg and Cyprus also get a lower estimate. For 2027, the estimate for Bulgaria is raised, as are those for Portugal, Greece, Slovenia, Estonia, Cyprus and Malta.
Compared with April, the 2026 forecast is also higher for Portugal, Finland, Slovakia, Slovenia, Latvia, Estonia and Malta. It is unchanged for Belgium and Greece. For 2027, the estimate is lower for Austria, Finland, Croatia, Lithuania, Luxembourg and Latvia, and stays the same for Belgium and Slovakia.
Among the big eurozone economies, Germany sees the biggest change. Its 2026 forecast is up from 0.7% in July to 1.3%. Italy will grow by 0.8% instead of 0.5%, Spain by 2.5% instead of 2.1%, and the Netherlands by 1.5% instead of 1.0%.
France and Ireland are the exceptions. The fund cut its forecast for France from 0.6% to 0.4%. For Ireland it expects the economy to shrink by 1.0%, where in July it expected a fall of 0.8%.
For 2027, the overall eurozone forecast stays at 1.2%, as in July, but there are changes by country. Germany is at 1.1% instead of 1.0%, Italy at 0.6% instead of 0.5%, and the forecast for France is cut from 0.9% to 0.7%. Spain stays at 1.8% and the Netherlands at 1.3%, while the fund raised its estimate for Ireland.
The fund also raised its inflation forecasts for the eurozone for 2026 and 2027. Prices will rise by 3.1% on average in 2026, against 2.9% in the July estimate, and by 2.8% in 2027, against 2.3% before. Goods and services will get more expensive faster than expected in July.
The IMF says core inflation, which leaves out the sharpest price swings, will return to about 2% only by mid-2028.
Unemployment in the eurozone is expected at 6.3% for 2026 and the same for 2027. The current account surplus, meaning the eurozone's gain in its transactions with the rest of the world, will be 1.2% of gross domestic product in 2026 and 1.3% in 2027.
The fund says expensive energy and weak consumer confidence are holding back growth in the eurozone. The bloc gains less than the US and parts of Asia from the boom in artificial intelligence investment.
The IMF bases its forecasts on futures prices, which are the prices in deals for future delivery. On these calculations, a barrel of oil will cost $95.74 on average in 2026, against $89.27 in the July forecast.
In 2025 the average price was $67.74 a barrel, so oil will cost more than 41% more in 2026. For 2027 the fund expects an average of $87.39 a barrel, while in July it assumed $78.70.
Costly energy and food are also pushing up inflation worldwide. For 2026 the fund kept its July forecast of 4.7%, and for 2027 it raised the forecast from 3.9% to 4.1%. World inflation was 4.1% in 2025.
The world economy grew by 3.5% in 2025. For 2027 the fund expects 3.4%, the same as in the July update.
The IMF says the world economy is holding up, but the gaps between countries are growing deeper and growth rests on an ever narrower base. About 32 economies account for 95% of world growth, against 54 in the April forecast. Estimates are cut for nearly 47% of countries.
Growth is concentrated in countries that are less hit by the energy shock and in those that gain from AI investment.
The US is among them. The IMF forecast for 2026 stays at 2.3%, and the forecast for 2027 is raised from 2.2% in July to 2.3%.
The US economy rests on steady household spending, government spending and tax policy, favourable financial conditions, technology investment and higher productivity. The US is a net energy exporter, meaning it sells more than it buys, so the war in the Middle East hits it less directly.
The fund cut its forecasts for China by 0.1 percentage points for each year from July. China's economy will grow by 4.5% in 2026 and 4.0% in 2027. Pricier oil, prolonged uncertainty and structural problems, including real estate, hold back its growth. The IMF says government support should prevent a sharper slowdown.
India is among the fastest-growing big economies. By fiscal year, the IMF expects growth of 7.0% in both 2026 and 2027. That is 0.6 points above the July estimate for the first year and 0.3 points above it for the second. By calendar year, growth will be 7.4% in 2026 and 7.0% in 2027. Steady domestic demand and strong services drive it.
Japan will grow by 0.7% in both years. For 2026 that is 0.1 points more than the July estimate, and the 2027 forecast is unchanged. The fund says support from the state budget partly softens the cost of pricier energy. Next year the effect of the energy shock is expected to fade, and monetary policy is expected to return gradually to normal.
Russia will grow by 0.9% in 2026 and by the same in 2027, with forecasts for both years cut by 0.2 points from July. Higher commodity prices help the Russian economy, but weaker oil exports because of damage to energy infrastructure limit the effect.
For Ukraine the fund has no July estimate and compares with April. It expects growth of 1.0% in 2026, against 2.0% in the April forecast, and leaves its expectation for 2027 at 3.5%.
Average annual inflation in Ukraine will be 8.9% in 2026 and 8.7% in 2027. Unemployment will be 10.2% in 2026 and will rise to 11.3% in 2027. The current account deficit will be 11.0% of gross domestic product this year and 4.7% next year.
The IMF says the Middle East is hit hardest. The fund expects the economies of the Middle East and Central Asia to shrink by 0.3% in 2026, while in July it forecast growth of 0.7%. For 2027 it sees growth of 6.3%, against 6.5% in July, and expects output, exports and logistics to recover.
For Saudi Arabia the fund expects the economy to shrink by 3.3% in 2026, while in July it forecast growth of 1.7%. For 2027 the growth estimate is raised from 5.5% to 7.9%.
Bahrain, Iraq, Kuwait and Qatar will probably report double-digit falls this year. Next year the fund expects a double-digit recovery if energy exports and transport return to normal.
The IMF calls AI investment one of the main sources of strength for the world economy. Spending on chips, data centres, cloud infrastructure, power, networks, cooling and specialised buildings is lifting demand and investment even before the expected productivity gain has fully appeared.
The report says the benefits of the boom are highly concentrated. The US and China account for more than 75% of net imports of AI computing equipment and 57% of new data centres built since 2024. Taiwan and South Korea hold 62% of net trade in AI computing equipment.