The National Bank of Bulgaria has published its quarterly Economic Review (issue 3/2025), analysing key developments in Bulgaria’s economy based on macroeconomic indicators available up to 25 September 2025. The review highlights an acceleration in economic activity in the second quarter of 2025, very tight labour-market conditions, a rise in inflation, and continued rapid growth in household credit. Real GDP growth accelerated to 3.5% year on year in the second quarter of 2025, supported by a decline in goods imports and a sharp rise in government consumption; private consumption remained the main positive contributor, increasing by 6.9% in real terms, while net exports continued to contribute negatively. Labour-market conditions stayed tight, with employment up 3.7% year on year and labour shortages reaching historically high levels, alongside an 18.5% increase in nominal compensation per employee. Short-term indicators for the third quarter of 2025 sent mixed signals, but overall pointed to private consumption remaining central to GDP growth, with some measures of firms’ current production activity below long-term values while retail turnover rose and household sentiment stayed high by historical standards. Harmonised consumer price inflation rose to 3.5% in August 2025 from 2.1% at end-2024, driven mainly by food and services inflation of around 6–7%, with rising unit labour costs and strong private consumption supporting pass-through to consumer prices; household credit growth remained close to end-2024 levels, reaching 20.8% year on year in August, led again by housing loans. The issue also includes a study assessing Bulgaria’s fiscal position after 2020, presenting estimates that point to a deterioration over the period and indications of a procyclical fiscal policy that stimulates domestic demand and adds inflationary pressure during an upswing in the business and financial cycle.
National Bank of Bulgaria 2025-10-15
National Bank of Bulgaria publishes Economic Review showing faster Q2 2025 growth and signs of a worsening post-2020 fiscal position
The National Bank of Bulgaria's quarterly Economic Review highlights accelerated economic activity in Q2 2025, with real GDP growth at 3.5% year on year, driven by increased government and private consumption. Labour-market conditions remained tight, with employment up 3.7% and nominal compensation per employee rising 18.5%. The review also notes inflation rising to 3.5% in August 2025 and continued rapid household credit growth, alongside a study indicating a deteriorating fiscal position and procyclical fiscal policy.