OECD and EBRD Lower Bulgaria's Long-Term Growth Forecasts

The Organisation for Economic Co-operation and Development (OECD) and the European Bank for Reconstruction and Development (EBRD) have lowered Bulgaria's economic growth projections for 2027. In a June 3 report, the OECD projected growth will moderate to 2.5% in 2026 and 2.3% in 2027, attributing the slowdown to weaker domestic demand and high energy prices resulting from Middle East conflicts.

The OECD noted that inflation is expected to remain high at 4.3% in 2026 before dropping to 3.4% in 2027. The organization highlighted that Bulgaria's budget deficit has exceeded 3% of GDP due to spending on healthcare, social services, and public sector wages. This fiscal pressure led the government to implement subsidies for energy-intensive industries, agricultural producers, and low-income car owners to mitigate price volatility.

Similarly, the EBRD maintained a 2.7% growth forecast for 2026 but lowered its 2027 projection to 2.5%. The bank identified widening macroeconomic imbalances, including a current account deficit of nearly 3% of GDP and a budget deficit of approximately 3.5% driven by spending on defense, pensions, and social benefits. While the labor market remains tight and EU funds continue to support investment, business and consumer confidence have declined to their lowest levels since 2022 following a government resignation in December 2025.