Bulgarian Wages to Rise 9.3% in 2025, Slowing Thereafter with Productivity Gains

Wage growth in Bulgaria is projected at 9.3 percent for 2025, driven by stronger economic activity, a 15.4 percent rise in the minimum wage since January, planned public-sector pay increases, and acute labor shortages, according to the Bulgarian National Bank’s macroeconomic forecast.

Although compensation per employee will decelerate in line with easing inflation, ongoing labor scarcity will continue to push wages upward at a rate exceeding both productivity gains and price rises, thereby supporting household consumption throughout the forecast horizon.

In 2026, average pay per worker is expected to grow by 7 percent, accelerating to 7.9 percent in 2027 as productivity improves. Correspondingly, unit labor cost inflation should ease from 6.6 percent in 2025 to 4.5 percent by 2027, reflecting stronger productivity and more moderate wage increases.

Interest rates on new term deposits for the non-government sector are forecast to dip slightly in 2025 and then stabilize at year-end levels. Loan rates for businesses are expected to fall more noticeably over the period, tracking short-term euro-area rates. Both deposit and lending rates have been revised upward from previous projections, mirroring higher anticipated euro-area short-term rates.

Deposits by households and corporations are projected to grow robustly this year—albeit slowing from a projected 9.5 percent annual increase at end-2025 to 7.8 percent by end-2026 and 7.6 percent by end-2027. Credit to the non-government sector is likewise set to cool, with annual growth easing from 12.7 percent at end-2025 to 10.2 percent at end-2026 and 8.9 percent by end-2027. This deceleration reflects moderating overdraft usage, private investment, house-price inflation, and overall disinflation.