The BG economy continues to expand at a steady pace, with the latest GDP growth rate at 0.70% QoQ for Q3 2025. This figure marks a slight deceleration from the 0.90% growth recorded in Q2 but remains above the 12-month average of approximately 0.65%. The data reflects resilience amid global uncertainties and domestic policy adjustments.

Drivers this month

• Strong domestic consumption contributed roughly 0.30 percentage points (pp) to growth.
• Investment activity added 0.20 pp, supported by infrastructure projects.
• Net exports subtracted 0.10 pp due to weaker external demand.
• Government spending remained stable, contributing 0.10 pp.

Policy pulse

The current growth rate sits comfortably within the central bank’s target range, supporting a cautious monetary stance. Inflation remains moderate, allowing the Bulgarian National Bank to maintain interest rates steady at 3.25%, balancing growth and price stability.

Market lens

Immediate reaction: The BGN currency appreciated 0.15% against the EUR within the first hour of the release, reflecting investor confidence in sustained growth. Short-term government bond yields edged up by 5 basis points, signaling mild inflation expectations.

Core macroeconomic indicators underpin the GDP growth trajectory. Inflation in BG has stabilized at 2.80% YoY, close to the central bank’s 3% target. Unemployment remains low at 5.10%, supporting consumer spending. Industrial production rose 1.20% MoM in October, reinforcing the positive growth momentum.

Monetary Policy & Financial Conditions

The Bulgarian National Bank has kept its policy rate unchanged for the third consecutive quarter. Credit growth to the private sector accelerated to 4.50% YoY, reflecting improved lending conditions. Financial markets show moderate volatility, with the BG stock index up 3.40% over the past month.

Fiscal Policy & Government Budget

Fiscal policy remains expansionary, with the government increasing infrastructure spending by 7% YoY. The budget deficit narrowed to 2.10% of GDP in Q3, down from 2.80% a year ago, signaling improved fiscal discipline. Public debt stands at 45% of GDP, well below the EU average.

External Shocks & Geopolitical Risks

Global supply chain disruptions and regional geopolitical tensions have tempered export growth. The ongoing energy price volatility poses risks to inflation and production costs. However, BG’s diversified trade partners and energy mix mitigate some external shocks.

Financial Markets & Sentiment

Investor sentiment remains cautiously optimistic. The BG stock market’s 3.40% rise this quarter contrasts with modest gains in regional peers. Currency stability and steady bond yields support a positive risk environment.

Looking ahead, BG’s GDP growth is expected to moderate slightly but remain positive. The baseline forecast projects 0.60% QoQ growth in Q4 2025, supported by stable domestic demand and fiscal stimulus. Inflation is likely to stay near target, allowing monetary policy to remain accommodative.

Bullish scenario (25% probability)

• Stronger-than-expected export recovery lifts growth above 0.90% QoQ.
• Accelerated investment from EU funds boosts infrastructure and productivity.
• Global energy prices stabilize, reducing cost pressures.

Base scenario (50% probability)

• Growth holds around 0.60–0.70% QoQ, driven by consumption and moderate investment.
• Inflation remains near 3%, with steady monetary policy.
• Fiscal discipline continues, keeping deficits manageable.

Bearish scenario (25% probability)

• Geopolitical tensions escalate, disrupting trade and investment.
• Energy price spikes trigger inflationary pressures and dampen consumption.
• Monetary tightening abroad leads to capital outflows and currency volatility.

BG’s GDP growth rate of 0.70% QoQ reflects a stable but cautious economic environment. The interplay of domestic demand, fiscal support, and external risks will shape the near-term outlook. Policymakers face the challenge of sustaining growth while managing inflation and geopolitical uncertainties. Investors should monitor key indicators and market signals closely.

Key Markets Likely to React to GDP Growth Rate QoQ

The GDP growth rate influences several tradable markets sensitive to BG’s economic health. The Bulgarian lev (BGN/EUR) typically strengthens with positive growth surprises. The BG stock index (BGST) tracks corporate earnings linked to GDP trends. Regional currency pairs like EURUSD react to shifts in monetary policy expectations. Energy-related stocks such as XOM are impacted by energy price volatility affecting BG’s cost structure. Finally, the cryptocurrency BTCUSD often reflects broader risk sentiment tied to macroeconomic data.

Indicator vs. EURUSD Since 2020

FAQ

What is the current GDP growth rate for BG?

The most recent GDP growth rate for BG is 0.70% quarter-on-quarter as of Q3 2025.

How does BG’s GDP growth impact monetary policy?

Moderate GDP growth supports a stable monetary policy stance, allowing the central bank to maintain interest rates near 3.25%.

What are the main risks to BG’s economic outlook?

Key risks include geopolitical tensions, energy price volatility, and potential external demand shocks.

Key takeaway: BG’s economy remains on a steady growth path, balancing domestic demand with external uncertainties. Vigilant policy and market monitoring will be essential to sustain momentum.

This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.