Coface Outlook: Steady Economic Expansion for Bulgaria Through 2025

Coface Bulgaria has projected a steady expansion for Bulgaria's economy, despite ongoing economic challenges in the European Union. During the IX Conference on Risk Management titled "Risks of Optimism," agency manager Plamen Dimitrov presented a sector report predicting a growth rate of 2% for this year, with an increase to approximately 2.8% anticipated in 2025.

However, the report also highlights significant difficulties that European economies face due to geopolitical tensions, particularly related to the war in Ukraine and rising hostilities between Israel and Iran. Dimitrov noted that the Purchasing Managers' Index (PMI) in Central and Eastern Europe remains below the crucial 50-point mark, indicating broader industrial concerns and a cautious sentiment among consumers and businesses regarding the economic outlook.

The real estate sector in Bulgaria is expected to see continued price increases, fueled by limited supply and a surge in investments linked to the gray economy. Dimitrov suggested that Bulgaria's future adoption of the euro might help facilitate certain transactions in the property market.

Bruno de Moura Fernandes, Head of Macroeconomic Research at Coface Group, also addressed the conference, focusing on the current trends in commodity prices. He indicated a general stabilization of prices, with the exception of energy products, which have experienced notable volatility due to geopolitical disruptions. Specifically, the conflict in the Middle East raises concerns about global trade and the potential for Iran to obstruct passage through the Strait of Hormuz, which could lead to supply chain shortages.

Fernandes clarified that while such blockages would primarily impact shipments to China, they are unlikely to have long...