Political reforms, EU integration and macroeconomic stability have helped Bulgaria's economic performance to catch up with that of OECD economies in recent years. According to a new OECD report, a comprehensive set of reforms is now needed to sustain this strong progress.
The latest OECD Economic Survey for Bulgaria forecasts that GDP growth will slow to 2.6% in 2026 and 2.4% in 2027, from 3.0% in 2025. Inflation is forecast to decline to 2.7% in 2026 and 2.4% in 2027.
"Public debt is low, although prudent fiscal policy is now needed to maintain long-term fiscal sustainability and help reduce elevated inflation. Increasing business productivity, in particular by reducing barriers to entry, and improving the school system, should be key structural policy priorities, economists say.
Continued efforts are needed to address the growing cost pressures stemming from an ageing population and investment needs, while reducing informal employment and improving tax compliance. Extending the requirement for bank payments of wages to a wider range of firms would prevent tax revenue losses in the informal sector. Public spending reviews would help prioritize existing spending and create fiscal space for growth-enhancing spending on investment, innovation and skills.
Reforms to boost R&D, competition, investment and ultimately productivity growth would raise living standards. Public spending on research needs to increase, and university-business linkages can be strengthened. Easing regulations and stepping up anti-corruption efforts, combined with improved institutional capacity, would create a more favorable investment climate.
Improving the school system would raise the skills of the workforce and make Bulgaria a more attractive place to do business. Postponing tracking and providing on-the-job training for all vocational school students would help improve educational outcomes and equal opportunities.
Bulgaria is already meeting the EU’s 2030 target of a 55% reduction in emissions compared to 1990 levels, largely driven by structural changes during the country’s transition to a market economy. However, further progress is needed to achieve net-zero emissions targets by 2050, particularly in electricity generation and road transport. Detailed plans for the closure of coal-fired power plants, reforms to fuel and vehicle taxation, and greater investment in renewable energy and electricity grids would further reduce emissions without compromising energy security.