In 2025, Bulgaria faces a paradoxical economic picture. Despite some positive macroeconomic indicators such as low unemployment and income growth, the country is perceived as a high-risk destination for foreign investors. This unfavorable situation is due to one dominant factor – ongoing political instability, which has been confirmed by a number of authoritative sources.
Reports from institutions such as the Bulgarian Academy of Sciences (BAS) and the Organisation for Economic Co-operation and Development (OECD), as well as analyses by media outlets such as Bloomberg TV Bulgaria, Investor.bg, and Sega.bg, unanimously state that political uncertainty is a major and systemic risk factor for the Bulgarian economy. It is not merely a temporary phenomenon, but a deeply rooted problem that directly affects the investment climate.
One of the most serious effects of the unstable political environment is the stalling of key reforms. The continuous changes in government and the lack of long-term political consensus hinder the adoption and implementation of necessary changes in sectors such as justice, administration, and energy. These reforms are essential for creating a predictable and transparent business environment, but their absence discourages both local and foreign investors.
Another critical aspect highlighted by experts is the inefficient absorption of European Union funds. This includes funds under the Recovery and Resilience Plan, which is a key tool for modernizing the economy. Political instability blocks the work on projects and their funding, leading to a loss of valuable resources and a slowdown in economic growth. This negatively affects the confidence of European partners and investors, who observe how Bulgaria is failing to take advantage of the opportunities provided.
Ultimately, all of this leads to a decrease in the confidence of foreign investors. Companies seek stability, predictability, and security to make long-term plans. When a country is in a state of constant political crisis, it automatically becomes a high-risk destination. As a result, although Bulgaria may boast some positive economic indicators, the flow of foreign direct investment remains below its potential. This negative trend is a direct consequence of the perception of Bulgaria as a country with a risky investment climate, which political instability constantly fuels. Unfortunately, this problem is not limited to direct investments but affects the overall economic dynamics, limiting the potential for creating new jobs and increasing the well-being of citizens.
In conclusion, political instability in 2025 is a confirmed major risk to the Bulgarian economy. It not only delays key reforms and blocks European funding but also directly lowers the confidence of foreign investors. To reverse this negative trend, the country needs strong political will and predictability to ensure a secure and stable environment for business development. Without such changes, Bulgaria's economic potential will continue to be hampered, regardless of individual positive macroeconomic data.