Policy reforms, EU integration and macroeconomic stability have helped Bulgaria's economic performance move steadily closer to that of OECD economies in recent years. A comprehensive set of reforms is now needed to sustain this strong progress, according to a new OECD report.
The latest OECD Economic Survey of Bulgaria projects that GDP growth will moderate to 2.6% in 2026 and 2.4% in 2027, from 3.0% in 2025. Inflation is projected to decline to 2.7% in 2026 and 2.4% 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," OECD Secretary-General Mathias Cormann said, presenting the Survey in Sofia alongside Bulgaria's 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."
Continued efforts are required to address rising spending pressures from population ageing and investment needs, while reducing informal employment and improving tax compliance. Extending the requirement to make bank-based salary payments to a wider range of firms would prevent tax revenues from being lost to informality. Public spending reviews would help prioritise existing spending and create fiscal room for growth-enhancing spending on investment, innovation and skills.
Reforms to boost research and development, competition, investment, and ultimately productivity growth, would raise living standards. Public research spending should be increased, and links between universities and businesses can be strengthened. Easing regulations and reinforcing efforts to tackle corruption, combined with improved institutional capacity, would create a more favourable investment climate.
Improving the school system would boost workforce skills and make Bulgaria a more attractive place for doing business. Bulgaria's scores in the OECD's Programme for International Student Assessment remain below the OECD average. Delaying tracking and providing workplace-based training for all vocational students would help improve education outcomes and equality of opportunity.
Bulgaria already meets the EU's 2030 target of a 55% emissions reduction from 1990 levels, largely driven by structural changes during the country's transition to a market economy. However, further progress is needed to meet net-zero goals by 2050, particularly in power generation and road transport. Detailed coal plant closure plans, reforms to fuel and vehicle taxation, and higher investments in renewable energy and electricity grids would further reduce emissions without compromising energy security.
