Decline in Foreign Investment in Bulgaria in the First Half of 2025

The flow of foreign investments into the country is declining, according to preliminary data from the Bulgarian National Bank (BNB) for the first half of 2025. Despite the positive total value for the January-June period, the registered slowdown compared to the previous year raises questions about the economic dynamics and investment climate.

According to information provided by the BNB, the net flow of direct investments in the country, calculated on the principle of the initial direction of the investment, reached 848 million euros. This amount represents 0.8 percent of the forecasted gross domestic product (GDP), which is an indicator of their relative importance for the national economy. However, a comparison with the same period of the previous year (2024) reveals a downward trend. In the first six months of 2024, a positive flow of 879.4 million euros was reported, making the current result smaller by 31.4 million euros, or by 3.6 percent.

June's data is alarming

The statistics for the month of June are particularly alarming. The data shows that during this month, a negative flow of direct investments amounting to 359.6 million euros was reported. This value represents a significant deterioration compared to June 2024, when a negative flow was also registered, but on a much smaller scale – 69.3 million euros. Such a sharp reversal in monthly data could signal short-term shocks or a change in the mood of foreign investors.

In parallel, the BNB also published data on the net flow of direct investments abroad. For the period January-June, this indicator amounts to 244.3 million euros, which represents 0.2 percent of GDP. For comparison, during the same period in 2024, the net flow of investments abroad was significantly larger – 541.6 million euros (0.5 percent of GDP). This difference shows that domestic investors have reduced their capital investments abroad. In June, the net flow of investments abroad was positive, reaching 70.2 million euros, which is less than the reported positive value of 93.3 million euros in June of the previous year.

Situation analysis

Analysts note that the dynamics of direct foreign investments are a key indicator of the confidence of international business in a country_q_s economic environment. The current decline may be due to various factors, including:

• global economic trends
• regional uncertainty
• specific internal challenges

Although the total flow for the first half of the year remains positive, the data for June and the overall slowdown compared to the previous year represent a signal that requires careful monitoring and analysis by the economic authorities.

/VY/