The National Bank of Bulgaria’s Governing Council has taken note of the quarterly Economic Review (issue 1/2025), which analyses key trends in Bulgaria’s economy using macroeconomic indicators published up to 30 April 2025. The review points to early-2025 signs of slowing global growth, a likely moderation in Bulgaria’s GDP growth after a strong end to 2024, an acceleration in inflation, and continued strength in household deposits alongside steady household credit growth. Global GDP growth accelerated slightly in the fourth quarter of 2024 but showed signs of slowing at the start of 2025, with worsening trade conditions with the United States expected to have materially negative global effects. The review assesses Bulgaria’s direct export exposure to the United States as relatively limited, implying weaker direct trade-channel effects, while indirect effects could be significantly larger. In this context, the Federal Reserve kept the federal funds rate range unchanged, while the European Central Bank cut its key interest rates in March and April. Domestically, Bulgaria’s annual GDP growth accelerated to 4.1% in the fourth quarter of 2024, driven mainly by private consumption and inventory changes, while net exports contributed negatively; the National Bank of Bulgaria’s composite indicator signals a slowdown in real GDP growth in the first quarter of 2025 on both a quarter-on-quarter and year-on-year basis. Employment rose 1.0% year-on-year in the fourth quarter of 2024, supported by services and construction, and labour shortages eased slightly, mainly due to weaker industrial demand, though overall labour demand remained strong. HICP inflation increased to 4.0% in March 2025 from 2.1% at end-2024, largely reflecting faster price growth in food, administered-price items, and services, with one-off increases in administered prices and indirect taxes and ongoing pressures from unit labour costs and strong private consumption. Annual deposits growth in the non-government sector was 10.5% at end-March 2025, driven mainly by households, while the earlier acceleration in household credit growth paused in the first quarter of 2025, with mortgages contributing most.
National Bank of Bulgaria 2025-06-02
National Bank of Bulgaria publishes Economic Review signalling slower GDP growth in Q1 2025 and HICP inflation rising to 4.0% in March
The National Bank of Bulgaria's quarterly Economic Review highlights early-2025 signs of slowing global growth and a likely moderation in Bulgaria's GDP growth following a strong end to 2024. Inflation accelerated to 4.0% in March 2025, driven by rising food and service prices, while household deposits continued to grow strongly. Despite a pause in household credit growth, employment rose, supported by services and construction sectors.