Boosting business productivity and addressing fiscal pressures would unlock stronger and more resilient growth in Bulgaria.
Bulgaria has been closing the income gap with wealthier European economies. Policy reforms, EU integration and macroeconomic stability have delivered steady progress in recent years. The country adopted the euro as its official currency on January 1 of this year. But sustaining that momentum will require deeper structural reforms, according to the Organisation for Economic Co-operation and Development’s (OECD) latest economic survey of the country.
The organisation projects GDP growth will ease to 2.6 per cent in 2026 and 2.4 per cent in 2027, down from three per cent in 2025. Inflation should settle at 2.7 per cent this year before declining to 2.4 per cent in 2027.
“Bulgaria has steadily narrowed income gaps with OECD countries in recent years. The reforms adopted during the country’s OECD accession process will enable further progress by boosting competition and tackling corruption,” said OECD Secretary-General Mathias Cormann, presenting the survey in Sofia alongside Prime Minister Rosen Zhelyazkov.
“Public debt is low, though prudent fiscal policy is needed now to maintain longer-term fiscal sustainability and help reduce elevated inflation. Boosting business productivity, in particular by lowering barriers to market entry, and improving the school system should be key structural policy priorities.”
Bulgaria’s public finances look healthy today, but demographic pressures loom. An ageing population means rising spending commitments just as investment needs mount. Tax revenues are leaking through informality—extending mandatory bank-based salary payments to more firms would help plug the gap. Public spending reviews could identify savings to redirect toward infrastructure, innovation and skills development.
Productivity remains the prize
Raising living standards ultimately depends on boosting productivity. That means higher public spending on research and development, stronger links between universities and businesses, and cutting regulatory red tape. Tackling corruption more effectively and building institutional capacity would improve the investment climate. These are familiar prescriptions, but implementation has lagged ambition.
Bulgaria’s education system needs particular attention. The country’s scores in the OECD’s Programme for International Student Assessment remain below average. Later tracking of students into different educational pathways and workplace-based training for all vocational students would improve outcomes and equalise opportunity—making Bulgaria more attractive for business investment in the process.
Green transition, half-finished
Bulgaria has already met the EU’s 2030 target of cutting emissions 55 per cent below 1990 levels, largely thanks to structural changes during its transition to a market economy. Yet reaching net-zero by 2050 requires further action, particularly in power generation and road transport. Detailed coal plant closure plans, reformed fuel and vehicle taxation, and greater investment in renewables and grid infrastructure would cut emissions without compromising energy security.
The OECD’s message is straightforward: Bulgaria has come far, but the next phase of convergence will be harder. It requires not just policy announcements but sustained implementation—and political will.
