World Bank Downgrades Bulgaria’s 2025 Growth Outlook Amid Global Slowdown
Sofia, the Gulf Observer: The World Bank has sharply revised down its forecast for Bulgaria’s economic growth in 2025, citing a broader global economic deceleration and persistent domestic structural challenges. In its latest economic outlook report titled “Accelerating Growth through Entrepreneurship, Technology, and Innovation,” the institution now projects Bulgaria’s GDP to grow by only 1.6% in 2025 — a significant drop from its earlier forecast of 2.8%.
This 1.2 percentage point revision reflects mounting global pressures. The World Bank expects global economic growth to average just 2.3% in 2025–2026, down from 2.6% in 2024, and well below the pre-pandemic average of over 2.8% seen during 2010–2019. The slowdown is largely attributed to weakened investment flows, trade policy uncertainties, and persistent fragility in major economies, particularly within the eurozone.
For Bulgaria, the 2025 outlook marks a continuation of a slowing trend. Following a robust 7.8% rebound in 2021 and 4.0% in 2022, growth fell to 1.9% in 2023. The World Bank expects a further modest rise to 2.1% in 2026, still trailing earlier forecasts by 0.6 percentage points.
Despite the World Bank’s cautionary stance, other institutions paint a more optimistic picture. The International Monetary Fund (IMF) projects a 2.5% growth rate for 2025, slightly down from 2.8% in 2024. The Bulgarian National Bank (BNB) and the Ministry of Finance have both raised their forecasts to 2.8%, while Fitch Ratings anticipates an even stronger 3.1% GDP increase in 2025.
However, the World Bank report underscores structural weaknesses that could limit Bulgaria’s long-term potential. The country’s investment-to-GDP ratio remains at 18%, lagging behind the EU average of 21%. Additionally, declining labor productivity and sluggish business performance reflect a need for more effective structural reforms and innovation-led growth.
The report also highlights the broader challenges across the eurozone, with deteriorating growth outlooks driven by trade frictions, political uncertainty, and declining industrial competitiveness. Germany, in particular, is expected to face a second year of economic contraction in 2024, led by setbacks in its crucial automotive sector.
In this context, the World Bank calls on Bulgaria to focus on boosting entrepreneurship, investing in technology, and enhancing innovation to counteract the effects of slowing global demand and domestic inefficiencies. The report warns that without decisive policy actions, the country’s economic momentum could remain subdued, even as other forecasts offer a more favorable outlook.
