Finance Ministry: Middle East crisis to push up inflation in Bulgaria

The crisis in the Middle East is expected to weigh on Bulgaria’s economy, pushing up inflation and slowing GDP growth in 2026, the Finance Ministry said in its spring macroeconomic forecast.

The blockage of the Strait of Hormuz is cited as a key downside risk.

Annual average inflation, measured by the Harmonised Index of Consumer Prices, is forecast to rise to 4.3% in 2026, while economic growth is seen slowing to 2.6% due to weaker domestic demand.

The ministry also said adverse demographic trends would further constrain labour supply in the coming years. Employment growth is expected to rely mainly on bringing inactive people into the workforce and attracting workers from abroad.

Before the conflict, in its January forecast, the ministry had expected inflation to remain in line with the previous year at 3.5% in 2026 and to ease to 3.2% in 2027.

Editor: Miglena Ivanova

Edited and posted in English by E. Radkova