The Bulgarian National Bank has published its quarterly Economic Review (issue 2/2025), analysing key trends in the Bulgarian economy based on macroeconomic indicators available up to 9 July 2025. The review points to a slowdown in economic activity growth in the first quarter of 2025, an acceleration in inflation, and continued rapid expansion of household credit. Real GDP growth eased to 2.9% year on year in the first quarter of 2025, with domestic demand making a strong positive contribution while the negative contribution from net exports increased; real private consumption rose 9.0% year on year, supported by higher employment and household disposable income. Against a backdrop of significant labour shortages and rising public-sector wages, compensation per employee increased by 10.7% year on year in nominal terms (6.5% in real terms). Harmonised Index of Consumer Prices inflation rose to 2.9% in May 2025 from 2.1% at end-2024, mainly driven by food and services, with higher unit labour costs and strong private consumption supporting pass-through of higher production costs. Household credit growth remained close to end-2024 rates, reaching 20.7% year on year in May 2025, with slower growth in consumer credit and housing loans continuing to contribute most to household credit expansion. The review also highlights that uncertainty related to potential revisions to US trade policy is weighing on global activity and is expected to adversely affect Bulgaria’s real exports; the Bulgarian National Bank’s composite indicator signals a slight quarter-on-quarter slowdown in real GDP growth in the second quarter of 2025, while annual growth remains close to the first-quarter rate.

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