Fiscal Council Warns of “Shock Scenario” Risks for Bulgaria’s Economy in 2026

The Fiscal Council has outlined three alternative scenarios for Bulgaria’s economic development in 2026, reflecting heightened uncertainty driven by geopolitical tensions, domestic political instability, and risks linked to energy supply disruptions and global financial volatility. The institution assigns a 60% probability to the baseline scenario, while both the pessimistic and highly pessimistic outlooks are each estimated at 20%, underlining the need for flexible policy responses in a rapidly changing environment. In the baseline scenario, the Bulgarian economy is expected to experience a sharp rise in energy prices triggered by the war in the Persian Gulf, leading to weaker external conditions and slower growth....