Industrial production in Bulgaria stagnates, decline deepens

Industrial Production in Bulgaria Stagnates, Decline Deepens

The manufacturing sector in Bulgaria is stagnating, and the annual decline continues to deepen, according to the latest preliminary data from the National Statistical Institute (NSI). In July 2025, the overall industrial production index remained at the same level as the previous month, signaling a lack of recovery amid a still unstable economic environment.

Contradictory Picture on a Monthly Basis

Although the overall indicator is unchanged, the figure conceals diverse trends in individual sectors. The energy sector saw a slight increase, with the production and distribution of electricity, thermal energy, and gas rising by 2 percent. The manufacturing industry also reported a modest increase of 1.8 percent. This positive momentum, however, is sharply contrasted by a significant collapse in the mining and quarrying industry, where production shrank by a full 11.5 percent for the month.

Sectors with the Biggest Increase and Decrease

Within the manufacturing industry, some branches stood out with exceptionally strong growth. The production of fabricated metal products, except machinery and equipment, increased by an impressive 16.1 percent, and the "Manufacturing, n.e.c." sector grew by 14.6 percent.

On the other hand, a number of key industries are experiencing a serious decline. The production of other transport equipment, except motor vehicles, collapsed by 17.2 percent. A troubling decrease of 9.7 percent was also registered in the production of basic pharmaceutical products and preparations, which raises questions about the sustainability of one of Bulgaria's traditionally strong sectors.

Annual Decline is Worrying

The picture is much more negative when the data is compared to July 2024. The calendar-adjusted index of industrial production shows an annual decline of 8.3 percent. This result is particularly alarming as it indicates that the economic slowdown is not a temporary problem but a long-term trend.

Energy and Manufacturing - Main Drivers of the Decline

The main contributor to the annual decline is the energy sector, where the production of electricity, thermal energy, and gas plummeted by a colossal 34.9 percent. The manufacturing industry also reported a significant contraction of 3.3 percent, which highlights the challenges faced by key productions. Only the mining and quarrying industry showed a positive result on an annual basis, with a growth of 2.1 percent, but this is not enough to compensate for the losses in the other sectors.

Most Severely Affected Productions

A closer look at the manufacturing industry shows that some productions are facing particularly severe difficulties. A decline of 25.8 percent was registered in:

• the production of paper, paperboard, and articles thereof;
• the production of other transport equipment, except motor vehicles.

The clothing manufacturing sector shrank by 21 percent, and the production of basic metals – by 19.6 percent.

Despite the overall negative trend, there are a few bright spots. The production of tobacco products grew by 34.5 percent, and that of furniture – by 17.6 percent. These data, however, are isolated positive examples that do not change the overall picture of stagnation and deepening decline in Bulgarian industry.

It remains to be seen how the situation will develop in the coming months, but the initial data for July 2025 outline serious challenges for the country's economic recovery.