Bulgaria's Central Bank: Annual Inflation of Up to 5.2% by the End of 2026, 3.1% in 2027, and 2.9% in 2028

Annual inflation is expected to accelerate to 5.2% by the end of 2026, while average annual inflation is forecast to reach 4.6% in 2026, 3.1% in 2027 and 2.9% in 2028. This is according to an analysis by the Bulgarian National Bank (BNB) of the main trends in the development of the Bulgarian economy.

The projections are based on data and information published as at 18 September 2026, as well as a forecast of key macroeconomic indicators prepared on 21 September 2026.

Real GDP growth is expected to slow to 2.8% in 2026 and 2.5% in 2027, before accelerating to 2.7% in 2028.

According to the central bank, domestic demand, particularly private consumption, continues to be the main driver of economic activity, while net exports make a negative contribution.

Bulgaria’s current account deficit over the 12 months to July widened to its highest level since 2009, reaching 8.1% of GDP.

Labour market conditions in the country remain historically tight, although signs of a gradual cooling began to emerge in the second quarter of the year, the BNB added.

Annual inflation, measured by the Harmonised Index of Consumer Prices (HICP), accelerated to 5.0% in August 2026, up from 3.5% in December 2025. Energy products and services were the main contributors to the increase, as the conflict in the Middle East pushed up oil and fuel prices and raised companies’ production and transport costs.

Given the heightened uncertainty stemming from the military conflict in the Middle East, the baseline forecast has been supplemented with three alternative macroeconomic scenarios: favourable, adverse and severely adverse. These are intended to illustrate the potential macroeconomic effects of energy supply and price shocks of varying intensity and duration, the BNB said.