ING has become more cautious on Bulgaria’s economy, lifting its inflation forecast for 2026 to 5.1% and trimming its growth outlook for next year as energy costs and broader price pressures keep the country from easing as quickly as previously expected.
Bulgaria Inflation Forecast Lifted by ING
The revision matters because it points to a less favorable mix for policymakers and investors: slower growth alongside stickier inflation. For a country still converging toward eurozone norms, that combination can delay rate relief, complicate fiscal planning and keep real household spending under pressure.
The Dutch lender now expects average inflation to rise to 5% in the third quarter of 2026 and 5.4% in the fourth quarter, compared with 4.6% and 4.8% in its July outlook. It also lifted its 2027 inflation forecast to 3.3% from 2.9%, while warning that the disinflation path will be more limited than it had thought two months ago.
Growth forecasts were cut for 2027, with ING saying the downgrade is concentrated in the second half of the year. Even so, Bulgaria is still expected to outgrow the euro area, where ING now sees expansion of 0.8% in 2026 and 1.3% in 2027, up from 0.5% and unchanged previously.
The inflation revision is tied to a tougher external backdrop, including higher expected energy prices and more persistent geopolitical risk. ING lifted its Brent forecast for the fourth quarter to $80 a barrel from $74 and raised its TTF gas assumptions sharply, reflecting a longer period of uncertainty around Middle East supply routes and tighter financing conditions globally.
For investors, the immediate takeaway is that Bulgaria’s macro story remains supportive on relative growth, but not on price stability. That can matter for local bonds, bank lending expectations and corporate margins, especially if borrowing costs stay elevated for longer in the eurozone and across emerging Europe.
ING also added 2028 forecasts for Bulgaria, projecting 2% growth and 3.2% inflation, underscoring its view that the economy should keep expanding but with a slower return to price stability than previously expected. The next test is whether the higher inflation path feeds into domestic wage demands and consumer spending before growth slows further.
| Entity | Gains | Losses |
|---|---|---|
| Bulgaria’s exporters | ▲Stronger nominal demand | ▼Higher input costs |
| Bulgarian consumers | ▲None | ▼Real purchasing power |
| Local policymakers | ▲More time to manage adjustment | ▼Harder inflation control |
| ING forecast accuracy | ▲More realism in pricing | ▼Earlier lower-inflation view |
