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Economic and political overview

Economic Overview

Since the beginning of the century, Bulgarian authorities have maintained macroeconomic stability, supported by a currency board arrangement and prudent fiscal policies. This has enabled the country to navigate recent crises effectively while staying on a steady path of income convergence. After the energy price shock in 2022 and weak external demand in 2023, Bulgaria's economy grew at a faster pace in 2024, reaching 2.3% compared to 1.8% the previous year, driven by both domestic and foreign demand, along with an expansionary fiscal stance. Growth is projected to rise to 2.5% in 2025 before easing to 2.8% in 2026 (IMF). The deployment of unlocked EU funds is expected to boost both public and private investment, which was restrained in 2024. Low unemployment and strong real income growth will continue to drive household consumption, while export growth is anticipated to recover alongside external markets. Inflation is likely to remain near current levels, though a further minimum wage increase in 2025 and ongoing labour shortages will sustain wage pressures.

Bulgaria’s general government deficit rose to 3% of GDP in 2024 (from 2% in 2023) due to higher public pensions and salaries approved in 2022, outweighing revenue gains from social security contributions and direct taxes. Measures to boost revenue included tighter control of high-risk goods and maintaining a 100% dividend on state-owned enterprises. According to the EU Commission, in 2025, the deficit is expected to edge up to 2.8% of GDP as pension and salary spending continues to rise, though at a slower pace. Public investment is set to increase, driven by RRP implementation and military spending accruals. Social security contributions should grow in line with wages, while corporate tax revenue is expected to decline. The deficit is projected to remain at 2.8% of GDP in 2026. The debt to GDP ratio – at 23.7% in 2024 – is set to increase marginally to 27.1% by 2026, still very low compared with EU countries. After decelerating steadily over 2023, Bulgaria's average annual inflation in 2024 was 2.4%, according to NSI data. In 2025, inflation is expected to ease to 2.3%, driven by negative energy inflation, low industrial goods inflation, and base effects from 2024's tourist service price hikes. According to the 2024 Convergence Report, Bulgaria met all euro-adoption nominal criteria except for price stability. The country is expected to adopt the euro by 2026.

Unemployment remained low in 2024, with manufacturing job losses offset by public sector and services hiring. Employment grew alongside higher participation rates, while wage growth accelerated due to labour market tightness and a 19.6% minimum wage hike in January. With a shrinking unemployed population, employment is expected to remain stable. The country officially attained high-income status on July 1, 2024, with a GDP per capita (PPP) estimated at USD 39,185 in 2024 by the IMF, still below the EU average. Income inequality in Bulgaria is among the highest in the EU, and almost 30% of the population is at risk of poverty (the second-highest rate in the EU after Romania).

 
Main Indicators 2024 (E)2025 (E)2026 (E)2027 (E)2028 (E)
GDP (billions USD) 112.23117.01123.07129.56136.13
GDP (Constant Prices, Annual % Change) 2.82.52.72.72.6
GDP per Capita (USD) 17,58818,52219,65820,88422,141
General Government Balance (in % of GDP) -3.2-3.1-2.3-3.2-3.2
General Government Gross Debt (in % of GDP) 23.428.029.531.233.0
Inflation Rate (%) 2.63.72.32.22.0
Unemployment Rate (% of the Labour Force) 4.24.14.14.04.0
Current Account (billions USD) 0.24-1.70-1.19-1.68-1.06
Current Account (in % of GDP) 0.2-1.5-1.0-1.3-0.8

Source: IMF – World Economic Outlook Database , Latest data available

Country Risk

See the country risk analysis provided by La Coface.

 

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Main Sectors of Industry

Traditionally an agricultural country, Bulgaria is now considerably industrialized. In fact, the agricultural sector only accounts for 2.5% of GDP and employs 5.7% of the workforce (World Bank, latest data available). The main crops are sunflower, tobacco, and wheat. Around 41% of the country’s territory is considered agricultural land. The total number of agricultural holdings is 132,742, while the total number of registered farmers in 2021 was 76,372 (EU Commission, latest data available). According to preliminary NSI data, in 2024, the agricultural industry's final output at basic prices totalled BGN 9,440.6 million. The gross value added at basic prices fell by 9.9% compared to the previous year, amounting to BGN 3,798.9 million, while the net entrepreneurial income was BGN 889.1 million.

The industry represents 22.7% of the GDP, and 29.6% of the workforce is employed in the sector. It continues to rely heavily on the manufacturing sub-sectors (metallurgical, chemical, machine-building), which are estimated to contribute to 14% of GDP (World Bank). The manufacturing and mining sectors play a crucial role in Bulgaria’s economy, making significant contributions to industrial production and employment. However, these sectors are currently facing challenges such as high energy consumption, outdated equipment to some extent, and a heavy dependence on fossil fuels. The most dynamic sectors are textile, pharmaceutical products, cosmetic products, mobile communication, and the software industry. Bulgaria's main mineral resources include bauxite, copper, lead, zinc, coal, lignite (brown coal), and iron ore.

The tertiary sector has more than doubled its contribution to the country’s economy since the end of the communist system, accounting for 62.5% of GDP and employing around 64.7% of the workforce. Tourism is one of the fastest-growing sectors: it was estimated to contribute 3.1% of GDP before the pandemic. The sector showed signs of recovery in 2024, when Bulgaria welcomed 13.24 million tourists, 4.9% more than the previous year, surpassing the level recorded in 2019. According to the latest figures from the European Banking Federation, 23 banks are currently operating in Bulgaria, six of which are foreign bank branches. The top five banks hold approximately 76.8% of all assets. In 2023 the banks’ total assets increased by 10.7% year-over-year to EUR 87.98 billion.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 5.7 29.6 64.7
Value Added (in % of GDP) 2.1 22.5 62.6
Value Added (Annual % Change) -7.0 1.9 3.1

Source: World Bank - Latest available data.

 
Monetary Indicators 20202021202220232024
Bulgarian Lev (BGN) - Average Annual Exchange Rate For 1 USD 1.721.651.861.811.81

Source: World Bank - Latest available data.

 

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Foreign Trade

Since joining the European Union, Bulgaria has experienced considerable growth in trade, despite a large trade imbalance and recurring deficits. The country is very open to foreign trade, which represents 120% of its GDP (World Bank, latest data available). Bulgaria mainly exports petroleum oils and oils obtained from bituminous (5.6%), wheat and meslin (3.5%), copper, refined, and copper alloys, unwrought (3.4%), medicaments consisting of mixed or unmixed (2.6%), and copper, unrefined; copper anodes for electrolytic (2%); while imports are led by petroleum oils (5.9%), copper ores and concentrates (3.6%), motor cars and other motor vehicles principally (3.3%), medicaments consisting of mixed or unmixed (3.1%), and petroleum gas and other gaseous hydrocarbons (1.9% - data Comtrade for 2023).

Bulgaria’s main export destinations in 2023 were Germany (13.6%), Romania (9.2%), Italy (7.2%), Turkey (5.8%), and Greece (5.5%); whereas imports came chiefly from Germany (12.4%), Turkey (8.2%), Romania (6.9%), the Russian Federation (6.7%), Italy (6.7%), and China (5.4%). Overall, the EU accounted for 63.5% and 59.9% of total exports and imports, respectively (data INS).

According to the latest figures from WTO, in 2023 exports of goods decreased by 4.1%, at USD 47.8 billion, with imports contracting at a faster pace (-7.1%), totalling USD 53.5 billion. The country is a net service exporter: it exported USD 15 billion worth of services, importing only USD 7.8 billion in 2023. The World Bank estimated the country’s trade balance to be positive by 4.1% of GDP in the same year. Preliminary data by the National Statistical Institute show that Bulgaria's balance on goods in 2024 was in negative territory, at EUR -5,470.5 million (5.3% of GDP), compared with a deficit of EUR -3,927.1 million (4.1% of GDP) in 2023, according to the Bulgarian National Bank. Exports of goods in 2024 totalled EUR 42,434.4 million (41.5% of GDP), dropping by 2.5% year-on-year. Imports of goods in 2024 totalled EUR 47,904.9 million (46.8% of GDP), growing by 0.9%.

 
Foreign Trade Values 20202021202220232024
Imports of Goods (million USD) 35,05646,21057,95953,63453,817
Exports of Goods (million USD) 31,95441,15749,92547,98046,425
Imports of Services (million USD) 4,7355,9837,4057,8388,193
Exports of Services (million USD) 8,70011,41913,68416,20916,542

Source: World Trade Organisation (WTO) ; Latest available data

Foreign Trade Indicators 20202021202220232024
Foreign Trade (in % of GDP) 110.3121.2138.8119.7109.3
Trade Balance (million USD) -2,256-3,379-5,308-4,247-5,790
Trade Balance (Including Service) (million USD) 1,7482,1269844,2572,632
Imports of Goods and Services (Annual % Change) -4.210.715.3-5.51.3
Exports of Goods and Services (Annual % Change) -9.611.612.10.0-0.8
Imports of Goods and Services (in % of GDP) 53.959.368.957.853.5
Exports of Goods and Services (in % of GDP) 56.461.870.061.955.8

Source: World Bank ; Latest available data

Foreign Trade Forecasts 2025 (e)2026 (e)2027 (e)2028 (e)2029 (e)
Volume of exports of goods and services (Annual % change) 0.74.04.84.84.7
Volume of imports of goods and services (Annual % change) 4.44.06.34.24.7

Source: IMF, World Economic Outlook ; Latest available data

Note: (e) Estimated Data

 
International Economic Cooperation
Bulgaria is member of : the International Monetary Fund, the World Trade Organization, the World Bank, etc.

For further information, please consult the website of the Ministry of Economy of Bulgaria.

 

Main Partner Countries

Main Customers
(% of Exports)		 2024
Germany 15.2%
Romania 9.9%
Italy 6.9%
Türkiye 6.8%
Poland 5.4%
See More Countries 55.7%
Main Suppliers
(% of Imports)		 2024
China 10.5%
Germany 10.3%
Türkiye 8.8%
Italy 5.6%
Romania 4.7%
See More Countries 60.2%

Source: Comtrade, Latest Available Data

 

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Political Outline

Current Political Leaders
President: Bajram BEGAJ (since 24 July 2022)
Prime Minister: Edi RAMA (since 10 September 2013)
Next Election Dates
Presidential: 2027
Parliamentary: April 2026
Main Political Parties
Bulgaria has a multi-party system, where no single party generally has a chance of gaining power alone. Thus political parties work with each other to form coalition governments. The major political parties are:

- Citizens for European Development of Bulgaria (GERB): centre-right, it receives most of its support from nationalists and socialists. Leading a coalition government with SDS
- Union of Democratic Forces (SDS): centre-right, conservative
- BSP – United Left (BSP): centre-left, socialist, draws its support from rural areas. Electoral alliance in Bulgaria led by the Bulgarian Socialist Party
- We Continue the Change (PP): centre, liberalism, pro-European, in an electoral coalition with DB
- Democratic Bulgaria (DB): centre-right, pro-European
- Revival: far-right, ultranationalist
- Alliance for Rights and Freedoms (APS): centre, split for DPS
- Movement for Rights & Freedoms (DPS): centrist, liberal, formed mainly by the Turkish ethnic minority
- Morality, Unity, Honour (MECh): anti-establishment and anti-corruption platform
- Velichie: far-right.
Executive Power
The President is the chief of state and is directly elected for a 5-year term, renewable once, as is the Vice President. The President is the commander-in-chief of the armed forces and nominates the Prime Minister, who is elected by the National Assembly. The Prime Minister, as Chairman of the Council of Ministers, holds executive powers and is the head of government. The Prime Minister nominates the members of the Council of Ministers. The Council of Ministers is the principal body of the executive branch. If the National Assembly passes a vote of no confidence, the Council of Ministers must resign.
Legislative Power
Bulgaria has a unicameral parliament (called the National Assembly), consisting of 240 members who are elected for 4-year terms by proportional representation. A political party or coalition must obtain at least 4% of the vote in order to enter the National Assembly. The parliament is responsible for the enactment of laws, approval of the budget, scheduling of presidential elections, selection and dismissal of the Prime Minister and other ministers, declaration of war, deployment of troops outside of Bulgaria, and ratification of international treaties and agreements.
 

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