Bulgarian Economy: Growth Above 3% Until 2027, According to Allianz

The Bulgarian economy is emerging as one of the fastest growing in Central and Eastern Europe (CEE) during the period from 2025 to 2027, with the annual growth of gross domestic product (GDP) remaining above 3 percent. This optimistic forecast comes from the latest report by the trade credit insurer "Allianz Trade".

According to the report, strong domestic demand, supported by high household consumption and wage increases, will be the main driver of this growth. For 2025, a GDP growth of 3.1 percent is predicted, which will place Bulgaria in a leading position in the region, with the exception of only Croatia (4 percent) and Poland (3.3 percent). In 2026, with an expected growth of 3.2 percent, our country is expected to take third place after Croatia (3.8 percent) and Poland (3.4 percent). In 2027, with a projected growth of 3.1 percent, Bulgaria is expected to take the leading position in CEE.

Analysts emphasize that investments will also play a key role in economic growth over the next three years. These investments are closely linked to the development of projects financed by the European Union under the National Recovery and Resilience Plan, as well as with large-scale public spending on infrastructure and defense.

The report predicts a stable labor market, with unemployment expected to fall to around 3.3 percent by 2027. Inflation is expected to calm down to levels below the regional average, demonstrating a downward trend - from 3.6 percent for 2025, through 2.8 percent for 2026 to 2.6 percent for 2027.

Giovanni Scarpato, economic analyst for Central and Eastern Europe at "Allianz Trade", explains that Bulgaria's upcoming accession to the Eurozone at the beginning of 2026 will increase confidence and activate the internal engines of the economy. "In anticipation of the transition to the euro, households and companies are increasing deposits and credit activity. Lower financing costs and increased money supply are expected to further contribute to both consumption and investments", he points out.

Scarpato summarizes: "All these factors are the basis of an expected period of stable and demand-driven economic growth, which leads us to believe that Bulgaria will outperform most of the countries in the region".

In addition, by 2030, the Bulgarian economy will register an additional cumulative growth of 2.8 percentage points, thanks to the country's commitments in the field of defense. In this indicator, Bulgaria ranks eighth among 20 European countries. Although the contribution is more moderate, it still puts the country in a solid position in the region. For comparison, Latvia leads in CEE with an additional 11.7 percentage points, followed by Lithuania (+6.9 percentage points) and Hungary (+6.6 percentage points).

It is important to note that the International Monetary Fund also forecasts economic growth of over 3 percent for Bulgaria this year and next, according to its regular report "World Economic Outlook".

Despite the optimistic prospects, the analysis of "Allianz Trade" warns of global risks that could affect the Bulgarian economy. The so-called "tariff war" will have a limited effect on Bulgaria, but it may create difficulties, especially for export-oriented businesses.

Camelia Popova, manager of "Euler Hermes" (Euler Hermes) for Bulgaria, which is already operating under the trade mark "Allianz Trade", comments: "According to our experts, the unfolding global "tariff war" will have a relatively small direct effect on Bulgaria. The impact is estimated at a decrease of 0.2 percentage points of GDP growth in 2026 compared to a scenario without tariffs. This reflects Bulgaria's limited direct exports to the US. However, Bulgarian businesses also remain exposed to indirect risks, including weaker demand from key European partners, higher costs for input resources due to disrupted supply chains, and delayed investment decisions amid growing global uncertainty".

The ongoing growth in bankruptcies worldwide represents an additional risk factor. The data show that the increase in insolvencies in 2025 will reach 6 percent globally, with an additional growth of 4 percent in 2026. A calming of this trend is expected only in 2027.

Camelia Popova concludes: "In this troubled global context and given the current discussions about political and social stability in our country, despite the optimistic forecasts, Bulgarian companies must remain vigilant about the risks. Checking business partners, carefully monitoring worrying trends in various economic sectors, timely access to important information are decisive support that a proven partner like us can provide at any time. And trade credit insurance remains the key tool for protection".