Bulgarian Economy 2025: GDP, Consumption, and Income Growth

Bulgarian Economy Records Stable Growth in Q2 2025

The Bulgarian economy recorded stable growth in the second quarter of 2025, driven mainly by domestic consumption, while external trade continues to shrink. This is clear from an analysis by the chief economist of "United Bulgarian Bank" (UBB), Dr. Emil Kalchev, sent to the BTA.

According to the flash estimates of the National Statistical Institute (NSI), the real growth of the economy reached 3.1% on an annual basis. The main driver of this upswing was final consumption, which showed a strong increase of 6.5% and accounts for 80% of the structure of the gross domestic product (GDP). Investments also increased by 6.7%, but their share of GDP remains significantly smaller – only 19.1%.

Against this backdrop, exports continue to be the weak link in the economic picture, recording a 4.9% decline on an annual basis. Dr. Kalchev notes that imports also decreased slightly by 0.6%, which is directly related to the contraction of industrial production and the smaller import of mineral fuels in recent months.

The UBB analysis also highlights the sustained growth of incomes in the country.

The average monthly salary in June 2025 increased by 11.9% compared to the same month of the previous year, exceeding the growth from the first quarter (11.8%). This increase is observed in both the public (13.7%) and private sectors (11.3%). The most significant jump in salaries is in sectors such as

• "Culture, sport and entertainment" (21%)
• "Administrative and support service activities" (16.7%)
• "Education" (16.3%)

However, Dr. Kalchev warns that this systemic increase in salaries can also have negative consequences. He explains that an increase in remuneration that is not supported by an adequate increase in labor productivity stimulates inflation, undermines the competitiveness of the economy, and increases the budget deficit.

As the main factors for the rise in salaries, the economist points to state policy for increasing the minimum wage and public sector salaries. Added to this are limited labor resources and a shortage of qualified personnel, as well as the process of economic convergence with Eurozone countries as Bulgaria prepares to join the common European currency.

The rising inflationary pressure is becoming increasingly palpable. Consumer inflation, measured by national methodology, jumped to 5.3% in July, compared to 4.4% in June. A similar trend is observed in core inflation (which excludes the prices of food and fuel), which has slightly increased to 3.5%.

The analysis comes against the backdrop of low unemployment, which in July 2025 reached 3.7%, which further exacerbates the challenges facing the labor market.