Debt Reaches €34.6 Billion

Bulgaria's government debt reached €34.635 billion at the end of 2025, equivalent to 29.9% of gross domestic product, according to preliminary data from the National Statistical Institute (NSI).

The figures place Bulgaria fourth among the EU's least indebted member states. This marks the first time since late 2008 that Bulgaria has fallen outside the top three lowest-debt countries in the bloc.

The general government deficit stood at €4.113 billion, or 3.5% of GDP. The central government subsector accounted for the largest share at €3.854 billion (3.3% of GDP), with local government posting a deficit of €254 million and social security funds recording a marginal shortfall of €4 million.

Annual Increase Among EU's Steepest

Compared to the fourth quarter of 2024, Bulgaria's debt-to-GDP ratio increased by 6 percentage points — placing it among the countries with the most significant annual rises in the EU, alongside Finland, Poland, Romania, Belgium, France and Italy, according to Eurostat data cited by the NSI.

The NSI data does not specify what drove the increase. The €4.1 billion government deficit clearly contributed to rising debt levels, but the published figures do not include detail on spending patterns or revenue shortfalls in 2025.

The increase contrasts with Bulgaria's historically low debt profile. At the end of 2008, the country held sixth place in the EU with a debt-to-GDP ratio of 13.6%, according to historical Eurostat data referenced by Bulgarian news agency BTA.

EU Debt Landscape

At the end of the fourth quarter of 2025, the highest debt ratios in the EU were recorded in:

  • Greece: 146.1% of GDP
  • Italy: 137.1%
  • France: 115.6%
  • Belgium: 107.9%
  • Spain: 100.7%

The lowest debt levels relative to GDP were registered in:

  • Estonia: 24.1%
  • Luxembourg: 26.5%
  • Denmark: 27.9%
  • Bulgaria: 29.9%

Twelve EU member states recorded quarterly increases in their debt ratios during the fourth quarter of 2025, 14 saw declines, and Malta remained unchanged. The largest quarterly increases were observed in Latvia and the Netherlands, both rising by 2.1 percentage points, followed by Sweden, Poland, Finland and Bulgaria.

Several countries recorded notable annual reductions, including Greece, Cyprus, Ireland and Portugal, reflecting divergent fiscal trajectories within the bloc.

Debt Structure

Across the EU, government debt structures continue to be dominated by securities, which account for 83.5% of total government debt in the EU and 84.1% in the euro area. Loans make up 14.2% in the EU and 13.5% in the euro area, while currency and deposits represent 2.4% in both.

Overall EU debt levels decreased slightly compared to the previous quarter, falling to 81.7% of GDP from 82%. In the euro area, the ratio declined to 87.8% from 88.4%.

However, on an annual basis, both the EU and eurozone registered increases compared to the fourth quarter of 2024, indicating a broader upward trend in public indebtedness despite short-term fluctuations.

What It Means for British Readers

British investors holding Bulgarian government securities should note the upward trajectory in debt levels and the increased deficit. While Bulgaria's 29.9% debt-to-GDP ratio remains among the EU's lowest — less than a third of the UK's approximately 96% ratio — the 6 percentage point annual increase is significant.

Bulgaria's 3.5% deficit exceeds the EU's 3% Maastricht criterion. Under EU fiscal rules, sustained breaches can trigger corrective procedures, though Bulgaria's low absolute debt level gives it considerable room for manoeuvre. Whether the European Commission opens an excessive deficit procedure depends on the trajectory over coming quarters and any fiscal consolidation plans the government announces. No such plan is detailed in the available data.

The increase may influence future credit assessments or borrowing costs. British institutional investors and UK companies with exposure to Bulgarian sovereign debt should monitor whether credit rating agencies adjust their outlook in response to the rising deficit and debt trajectory.

UK businesses operating in Bulgaria may encounter fiscal policy adjustments as the government manages rising debt and deficit levels. Potential measures could include changes to public spending, procurement timelines, or tax policy — though no specific consolidation plan has been announced and the source data does not clarify what fiscal strategy, if any, the government is pursuing.

Bulgaria's rising debt also occurs during its first year using the euro, adopted on 1 January 2026. The fiscal trajectory could influence the country's standing within eurozone governance frameworks. While Bulgaria remains well below debt thresholds that typically trigger EU corrective procedures, the direction of travel — from historically ultra-low debt toward the EU mainstream — represents a structural shift in the country's fiscal position.

For British residents in Bulgaria, the practical implications depend on how the government chooses to address the deficit — whether through spending cuts, tax adjustments, or continued borrowing. The data does not indicate imminent fiscal crisis. Bulgaria's debt remains comfortably sustainable by European standards. But the sharpest annual increase in the EU does suggest the days of Bulgaria as an ultra-low-debt outlier may be ending.