Bulgaria

The Bulgarian National Bank (BNB) reported FDI inflows of €1.9 billion in Q1 2026, equivalent to 1.5% of GDP. Debt instrument flows—comprising financial loans, supplier credits, and debt securities—accounted for €876.2 million of that total, compared to €123.4 million in Q1 2025, indicating a marked shift toward intercompany debt financing. By source country, Luxembourg (€137.7 million), Switzerland (€129 million), and the Netherlands (€87.8 million) were the leading origin markets.

The Sofia Globe · 2026-05-21

A draft law establishing a formal FDI screening mechanism was published in Bulgaria in early May 2026, introducing a general authorization regime administered by a designated Council. The draft includes a security-interest exception allowing scrutiny of investments below the €1 million threshold, with the Bulgarian Investment Agency required to issue a compliance opinion within 10 days before forwarding applications to the Council for a 45-day decision window. Unauthorized investments would be subject to an administrative fine of 5% of investment value, with a minimum of approximately €25,565.

CMS Law · 2026-05-05

The technology, media, and telecommunications sector remains the most active destination for inbound FDI in Bulgaria, followed by construction, real estate, and financial services. Bulgaria's 10% flat corporate tax rate and comparatively low labor costs continue to underpin its structural attractiveness, though the new FDI screening framework signals a shift toward greater state oversight of strategic investments.

Lloyds Bank Trade — International Trade Portal · 2026-05-22

Bulgaria's trade deficit widened materially in Q1 2026, reaching a cumulative €3.283 billion compared to €2.475 billion in the same period of 2025, driven by import growth of 9.2% outpacing export growth of 3.7%. In March 2026 alone, the deficit reached €1.426 billion—the largest monthly shortfall since December 2025—as imports surged 18.6% year-on-year to an all-time high of €5.521 billion, with both EU and non-EU sourcing contributing to the increase.

Trading Economics · 2026-05-13

The Organisation for Economic Co-operation and Development (OECD) assessed that recent U.S. tariff increases on European Union goods will have only a modest indirect impact on Bulgaria, primarily through weaker EU-wide demand, given Bulgaria's limited direct trade exposure to the United States. Bulgaria's trade framework remains anchored in EU membership and World Trade Organization (WTO) rules, with bilateral free trade agreements in place with Turkey, China, Israel, and several Western Balkan states.

OECD Economic Outlook, Volume 2025 Issue 2 · 2026-05-22

The U.S. International Trade Administration's April 2026 country guide reaffirms that Bulgaria is a relatively open market but flags non-tariff barriers arising from administrative and procedural requirements. Weak intellectual property (IP) protection and limited regulatory transparency and predictability remain the primary market access concerns for foreign firms, particularly U.S. operators.

U.S. International Trade Administration — Trade.gov · 2026-04-01

The European Commission's Spring 2026 forecast projects Bulgarian real GDP growth of 2.5% in 2026 and 2.2% in 2027, a deceleration from 3.1% in 2025, reflecting slower private consumption amid moderating wage and employment growth. The general government deficit is forecast to reach 4.1% of GDP in 2026 and 4.3% in 2027, driven by social spending commitments and sustained defence expenditure, with Bulgaria operating under a bridge budget following the government's resignation at end-2025.

European Commission — Economic Forecast for Bulgaria · 2026-05-21

The OECD projects fiscal consolidation over 2026–2027, with capital expenditure likely to be curtailed to keep the deficit within EU limits given lower-than-planned VAT revenue collection. The European Commission has authorized Bulgaria to temporarily exceed the 3% deficit threshold until 2028 under an exceptional circumstances clause, providing limited near-term fiscal flexibility.

OECD Economic Outlook, Volume 2025 Issue 2 · 2026-05-22

Following euro area accession on 1 January 2026 at the fixed conversion rate of 1 euro = 1.95583 leva, minimum reserve requirements for Bulgarian banks are set to fall from 12% to 1%, potentially increasing banking sector liquidity and supporting credit and investment lending. The OECD notes this may necessitate stricter macroprudential measures to prevent overheating in consumer credit markets.

OECD Economic Outlook, Volume 2025 Issue 2 · 2026-05-22

Bulgaria is eligible to receive up to €6.2 billion through the EU National Recovery and Resilience Plan (RRP) over 2021–2026, targeting green energy, digitalization, and private-sector development. Accelerated RRP absorption is expected to support public investment through 2026, partially offsetting the fiscal drag from the bridge budget and providing commercial opportunities in infrastructure and energy transition sectors.

U.S. International Trade Administration — Trade.gov · 2026-03-31

The BNB has confirmed the countercyclical capital buffer for credit risk exposures will remain at 2% in Q1 2027, signalling a stable near-term prudential stance. Euro adoption has eliminated currency risk for intra-EU transactions and is expected to reduce transaction costs with key European trading partners, improving the commercial operating environment for cross-border businesses.

Novinite — Sofia News Agency · 2026-01-01

The Invest Bulgaria Agency (IBA) remains the primary institutional point of contact for foreign investors under the 2004 Investment Promotion Act, which guarantees equal treatment of domestic and foreign capital. However, the pending FDI screening legislation will require qualifying investors to route applications through the IBA before Council review, adding procedural steps that market entrants should factor into investment timelines.

CMS Law · 2026-05-05