AGP Executive Report

Education & Skills: Romania’s PISA 2025 results show more than half of 15-year-olds below basic proficiency in maths and reading, with inequality between advantaged and disadvantaged students still widening; Bulgaria is also flagged as slipping further in maths and reading, with over half of students failing to reach the PISA baseline. Aviation & Tourism Links: Wizz Air is expanding from Armenia, adding a fourth aircraft in Yerevan and launching new routes to Basel, Varna and Valencia, with higher frequencies on existing lines—good news for travel demand and regional connectivity. Healthcare Industry: Bulgaria’s Advanced Medical Care breaks ground near Plovdiv on a EUR 7 mln plant to produce saline solution and medical supplies, aiming to cut reliance on imports and create 35 jobs. Agriculture: Burgas grape growers expect a better harvest than 2025, citing improved frost/hail conditions and stable quality, though buyers remain hard to find. Public Finance Dispute: GERB-UDF alleges the Road Infrastructure Agency is preparing documents to shift spending from 2026 to 2025 to manipulate the deficit figures, a claim the government rejects. Energy Infrastructure (Regional): Romania’s regulator approved a transmission network development plan through 2035, including more cross-border electricity capacity with Bulgaria and Hungary. Business Expansion (M&A): Lexroom, a legal AI firm, acquires French Query Juriste and Bulgarian Praven Intelekt to scale its platform across civil-law markets. Trade & Investment: Bulgaria’s economy minister meets China’s vice president to discuss deeper trade and investment, with automotive and new production highlighted.

Bulgaria–China Business Push: Deputy Prime Minister and Economy Minister Alexander Poulev met Chinese Vice President Han Zheng in Xiamen, pitching Bulgaria to Fujian-based firms and highlighting cooperation in automotive, electronics, new energy and green technologies. Economic Momentum: Bulgaria’s Q2 GDP grew 2.8% year-on-year (and 0.7% quarter-on-quarter), slightly revised up, with consumption still the main driver. Energy Investment Outlook: The European battery storage market is set to reach 57 GWh in 2026, with Bulgaria among the growth leaders as EU recovery programmes boost momentum. Tourism Tax Debate: Bulgarian restaurateurs renewed calls for lower VAT on tourism after Deputy PM Atanas Pekanov said no cut is planned. Media & Culture Risk: Filmmakers protested over Boyana Film Studios’ future after the privatization period ends on Nov 17, demanding clarity on compliance and guarantees. Mobile Costs Watch: A study by Broadband Genie ranked the UK 46th for mobile broadband data cost; it underlines how pricing comparisons can vary by caps and fair-use rules. Regional Context: Greece’s economy grew 0.3% in Q2, trailing the EU and eurozone, while stone fruit exports surged on better weather.

Bulgaria-China Business Push: Deputy PM Alexander Poulev met Chinese Vice President Han Zheng and Fujian officials to deepen trade and investment ties, pitching Bulgaria as a destination for electronics, automotive, new energy and green tech, with a key commission session due in Beijing on Sept 10. Macroeconomy Update: Bulgaria’s Q2 GDP growth was revised up to 2.8% y/y (from 2.7% flash), with quarterly growth at 0.7%, while consumption still dominates GDP spending. Energy Storage Momentum: EUPD Research expects Europe’s battery storage market to reach 57 GWh in 2026, with Bulgaria among the growth leaders as EU recovery programs boost PV-plus-storage demand. EV Aftermarket Deal: AVILOO expanded its battery warranty to more European markets from Sept 7, including Bulgaria, aiming to raise buyer confidence in used EV batteries. Tourism VAT Fight: Restaurateurs again urged a lower VAT for tourism, pushing back on Deputy PM Atanas Pekanov’s stance that the sector’s prices don’t justify a cut. Regional Gas Connectivity: North Macedonia and Serbia joined Greece-led Vertical Corridor, strengthening cross-border gas flows and supply security. Business & Trade: Sineng supplied 6.9MW central PCS MV stations for Bulgaria’s Burgas BESS, supporting a wider 602MWh project for grid balancing. EU Living-Standards Context: Greece and Bulgaria are now tied at the bottom of the EU living-standards ranking, underscoring the pressure on household purchasing power.

Tourism & VAT: Deputy PM Atanas Pekanov says there will be no VAT cut for Bulgaria’s tourism sector, arguing the industry already benefited from past support and then “took advantage” of the euro by raising prices. Minimum Wage: Labour Minister Natalia Efremova expects Bulgaria’s 2027 minimum monthly wage to rise by about EUR 40–50 (from EUR 620.20), with a Christmas supplement of EUR 50 for low-income groups. Healthcare Reform: Health Minister Katya Ivkova says Bulgaria’s healthcare quality assessment system is realistic to adopt by year-end, with plans to consult the medical community and tackle high out-of-pocket payments. Rail Disruption: A fire near Sahrane railway station in central Bulgaria suspended services on the Sofia–Burgas express line. Agriculture Biosecurity: Bulgaria’s Food Safety Agency confirms sheep and goat pox in Smolichano, with protection and surveillance zones and movement restrictions. Energy & Gas: Vertical Corridor expands as TSOs sign an MoU adding North Macedonia’s NOMAGAS and Serbia’s Transportgas Serbia, boosting cross-border gas capacity and bidirectional flows. Business Diplomacy: Bulgaria’s economy leadership will head to Beijing for the Bulgaria–China Intergovernmental Joint Commission on Sept 10, focusing on industrial cooperation, autos, decarbonisation and green tech. Stock Market: Sopharma is reported to have become Bulgaria’s largest listed company after a share-price rally.

Healthcare Reform: Health Minister Katya Ivkova says Bulgaria’s healthcare quality assessment system is realistic to be adopted by year-end, with consultations for an objective review and follow-up actions against substandard providers; she also flags that out-of-pocket payments exceed 40%, fueling mistrust. Tourism Policy: Deputy PM Atanas Pekanov rules out a VAT cut for tourism, arguing the sector already received COVID-era support and then “took advantage” of the euro to raise prices. Labour & Incomes: Social Affairs Minister Natalia Efremova expects Bulgaria’s 2027 minimum wage to rise by about EUR 40–50 (from EUR 620.20), with a Christmas supplement for low-income groups. Energy & Infrastructure: Bulgaria and Slovakia deepen cooperation on energy, transport connectivity, innovation and new technologies, including plans for a joint nuclear energy commission. Gas Connectivity: The Vertical Gas Corridor adds North Macedonia’s NOMAGAS and Serbia’s Transportgas Serbia, expanding cross-border capacity and bidirectional flows. Food Safety: Sheep and goat pox is confirmed in Smolichano; protection and surveillance zones are in place with movement restrictions. Business Diplomacy: Bulgaria-China’s intergovernmental economic commission is set to meet in Beijing on Sept 10, focusing on industrial cooperation, autos, decarbonisation and green tech. Local Governance: Sunny Beach infrastructure should be transferred to Nessebar Municipality and the Burgas water utility, the regional minister says, calling current management “unlawful.” Culture & Economy: Varna’s World Festival of Animated Film crowned Czech “Gently” with the Grand Prix and Bulgarian “Nephila” as best Bulgarian film.

Sheep & Goat Health Alert: Bulgaria’s Food Safety Agency confirmed sheep and goat pox in Smolichano (Kyustendil region), triggering a 5-km protection zone and a 20-km surveillance ring with movement restrictions to curb spread. Minimum Wage Outlook: Labour Minister Natalia Efremova says Bulgaria’s 2027 minimum wage could rise by EUR 40–50 (from EUR 620.20), with a Christmas supplement likely for 450,000–500,000 low-income people. Tourism & German Demand: Tourism Minister Ilin Dimitrov reports the summer season is tracking close to last year (within 1–2%), helped by the return of German visitors after earlier air-seat losses. Bulgaria–China Trade Talks: Deputy PM and Economy Minister Alexander Poulev leads the Bulgaria–China Joint Commission in Beijing on Sept 10, focusing on industrial cooperation, autos, decarbonisation and green tech. Energy Connectivity: The Vertical Gas Corridor expands as North Macedonia and Serbia join, extending regional gas links and boosting bidirectional capacity. Anti–Money Laundering Progress: PM Rumen Radev met FATF/MONEYVAL representatives; Bulgaria’s final decision on exiting the grey list is expected in October. Cybersecurity: A multinational operation disrupted the long-running Sality botnet, with Bulgaria among participating countries.

Minimum Wage Outlook: Bulgaria’s Labour and Social Policy Minister Natalia Efremova says the 2027 minimum monthly wage could rise by EUR 40–50 from EUR 620.20, with a Christmas supplement of about EUR 50 for 450,000–500,000 low-income people. Tourism Recovery: Tourism Minister Ilin Dimitrov reports the summer season is tracking close to last year (within 1–2%), with the return of German tourists after the loss of roughly 200,000 air seats earlier in the season. Bulgaria–China Trade Talks: A Bulgarian delegation led by Economy Minister Alexander Poulev will meet in Beijing on Sept 10 to review cooperation on investment, trade, innovation, transport, energy, agriculture and digital transformation. Energy Connectivity: The Vertical Gas Corridor adds North Macedonia’s NOMAGAS and Serbia’s Transportgas Serbia, expanding cross-border gas capacity and bidirectional flows. Anti–Money Laundering Progress: Prime Minister Rumen Radev met FATF/MONEYVAL representatives ahead of a final October decision in Paris on Bulgaria’s removal from the grey list. Sunny Beach Asset Transfer: The state wants Sunny Beach AD’s streets and water/sewer infrastructure transferred to Nessebar Municipality and the Burgas utility, calling the current setup unlawful.

Bulgaria-Slovakia Energy & Defence: Prime Minister Rumen Radev met Slovak PM Robert Fico in Sofia, agreeing energy is the “foundation” of both economies and setting up a joint commission on nuclear cooperation, with both sides also pushing closer defence industry ties. EU Money-Laundering Exit: Radev held talks with FATF and MONEYVAL experts on Bulgaria’s progress toward removal from the grey list; a final decision is expected in October in Paris. Regional Gas Connectivity: Bulgartransgaz says North Macedonia’s NOMAGAS and Serbia’s Transportgas Serbia joined the Vertical Gas Corridor, extending the route and boosting cross-border, bidirectional capacity planning. Sunny Beach Asset Transfer: The regional minister ordered Sunny Beach AD infrastructure to be transferred to Nessebar Municipality and the Burgas water utility, calling the current setup “completely unlawful” and rejecting a BGN 75m buyout. Judicial Appointments: Four more judge-quota nominations were published for the Supreme Judicial Council election. Markets Watch: Sopharma became Bulgaria’s largest listed company by market cap after a share-price rally, lifting the SOFIX index. Labour & Growth Debate: Trade unions criticized the government programme for lacking a clear income and consumption policy, warning of a growth drag. Retail Snapshot: Eurostat data put Bulgaria fifth in the EU for annual retail trade volume growth in July (+5.6%). Cybersecurity: A long-running Sality botnet was disrupted in a multinational operation involving Bulgaria and EU partners.

Sopharma’s Stock Surge: Bulgarian pharma Sopharma has overtaken Shelly Group to become the largest listed company on the Bulgarian Stock Exchange, with its market cap up nearly 20% in a month to over €1.24bn, after strong July sales and a 35% jump in first-half net profit. Retail Demand Pulse: Eurostat data show Bulgaria’s retail trade volume rose 5.6% year-on-year in July 2026, placing it fifth in the EU, though growth is slowing versus earlier months. Inflation Outlook: ING lifted its 2026 average inflation forecast for Bulgaria to 5.1% (from 4.9%) and cut 2027 growth to 2.3%, while expecting inflation to ease but remain higher than previously projected. EU Budget Fight: Senior EU officials in Dublin pushed for new “own resources” and taxes to fund the 2028–2034 long-term budget, clashing with scepticism from frugal member states. Nuclear Cooperation: Prime Ministers Rumen Radev and Robert Fico agreed to set up a joint commission with Slovakia to share nuclear know-how and support talks with Westinghouse on new reactors. Security & Energy Risks: Bulgaria reiterated support for Germany over alleged Russian hybrid sabotage tied to explosives-laden drones at Leipzig, while separate reports describe suspected arson and sabotage incidents near defence and power sites, including Bulgarian suspects in Munich cases.

EU Budget Talks in Sofia: European Council President António Costa met PM Rumen Radev to push agreement on the 2028–2034 long-term EU budget, with focus on competitiveness, energy security, connectivity and enlargement—while Bulgaria warned defence/security spending must not crowd out cohesion. Bulgaria’s Security Role: Radev said Bulgaria is backing EU common security initiatives like the European Air Shield and Space Shield and wants “industrial cohesion” so less-developed states can access tech and industrial funding. Hemus Deadline: Regional Development Minister Ivan Shishkov told MPs the Hemus motorway could be finished by end-2030, citing design work and disputed past delays. Passport Backlog: Bulgaria’s 10-year passport service could resume quickly after a promised delivery of blank booklets on Sept 29, following stock disruptions and a temporary stop in applications. Defence Sabotage Probe in Germany: Munich police arrested two Bulgarian nationals after incendiary attacks near Rohde & Schwarz, amid wider European concerns about sabotage and hybrid threats. Central Banks Add Gold: The World Gold Council reported central banks bought 23 tonnes of gold in July; China and Poland led, with Poland topping YTD purchases. Energy Renovation Funding: Bulgaria’s Development Bank completed contracting for NRRP energy renovations for 630 residential blocks, with EUR 332.5m managed and work across 100+ municipalities. AI in Bulgaria: President Iliana Iotova met the AI Sustainable Development Alliance, stressing secure, reliable AI deployment, worker retraining and education for responsible use.

Munich Defence Security: German police arrested two Bulgarian nationals after incendiary devices were thrown at a construction site outside Rohde & Schwarz in Munich, with investigators treating it as a possible politically motivated attack tied to the defence and drone supply chain; the fire was quickly extinguished and a second device was defused, amid wider European concern over alleged Russian sabotage. Energy Renovation (Bulgaria): The Bulgarian Development Bank completed on-time contracting for energy renovation of 630 multi-family residential blocks under the NRRP, with EUR 332.5m managed and work spanning 100+ municipalities. Air Links & Tourism: Bulgaria’s parliament tourism chair met Azerbaijan’s ambassador to push closer tourism cooperation and restore direct Sofia–Baku flights, including joint events and medical/spa tourism ideas. Defence Procurement: Three firms submitted bids to overhaul up to 10 MiG-29 engines (estimated EUR 17m), including Bulgarian companies Avionams and Aviostart alongside a Polish state-owned bidder. Education Readiness: Bulgaria’s education ministry says free textbooks and STEM centres are in place nationwide ahead of the Sept. 15 school start, while it plans changes to school subsidy calculations. AI Policy: President Iliana Iotova discussed Bulgaria’s AI development priorities, stressing secure, reliable use and retraining for jobs affected by AI. Energy Storage Market Signal: A new benchmark claims Bulgaria leads the world in battery storage relative to system size, highlighting how EU funding is accelerating storage deployment. Work-Permit Rules (EU/Europe): Switzerland, the Netherlands and Iceland published lists expanding permit-free work access for citizens of specific countries, including Bulgaria.

Tourism & Aviation: Bulgaria saw a 1.5% year-on-year dip in tourist numbers in June-July 2026, but the Tourism Minister said it’s not a “catastrophe” and floated a new fund to back flights to Northern Bulgaria plus changes to how municipalities spend tourist tax revenues. Airport Capacity Boost: SOF Connect launched a new checked-baggage system at Terminal 2, lifting capacity eightfold to 3,200 bags per hour and supporting plans for up to 20 million passengers a year. Energy & Sanctions: Parliament rejected a draft resolution seeking an EU exemption to allow imports of Russian petroleum products, while the government approved a derogation enabling Atomstroyexport to provide technical supervision for Belene NPP equipment preservation. EU Funds Oversight: Bulgaria expanded AFCOS powers to better manage planning, monitoring and reporting in the fight against EU funds fraud. Business Support: The Council of Ministers approved a World Bank advisory addendum to strengthen SME development in northern regions, and also backed investment cooperation steps with China. Security & Geopolitics: NATO intelligence talks in Sofia focused on Black Sea security, amid political pressure after Germany blamed Russia for the Leipzig airport drone incident. Regulation & Markets: Industry groups challenged a proposed methodology for fair value of staple foods, warning it could harm the free market. Tech & Standards: Dronamics joined a EUROCONTROL-led EU project to integrate large drones into European airspace, using joint flights to shape future certification standards. Cybercrime: US authorities, with CrowdStrike and regional partners including Bulgaria, dismantled the long-running Sality botnet tied to crypto theft.

Parliament & Taxes: MPs rejected on first reading Continue the Change’s VAT Act amendments to raise the VAT registration threshold to EUR 84,874, while also debating other fiscal moves. Euro Adoption: The deadline for companies to convert capital from leva into euro was extended from 12 to 36 months, easing pressure on the Commercial Register. Waste & Fees: Parliament approved at first reading amendments to the Waste Management Act, shifting parts of waste recovery oversight from the Environment Ministry to tax and customs bodies and scrapping a product fee for end-of-life motor vehicles. Energy & Gas: Bulgargaz is expected to keep natural gas prices below European market levels, helped by long-term supply contracts. Tourism 2027: The Tourism Ministry unveiled reforms for 2027, including a new Connectivity and Promotion Fund and rules pushing municipalities to reinvest tourist tax revenues into promotion and air links. Aviation & Logistics: SOF Connect launched a new EUR 15m checked-baggage system at Terminal 2, boosting capacity eightfold to 3,200 bags per hour. Drones & Standards: Dronamics joined an EU Horizon Europe project to integrate large drones into European airspace, working with BULATSA and EUROCONTROL. Cybersecurity: A major international operation disrupted the Sality botnet, active since 2003, by turning its peer-to-peer structure against operators and cutting off thousands of infected machines. EU Biodiversity: Bulgaria is among the countries that missed the 1 September deadline for national nature restoration plans under the EU Nature Restoration Law. Business & Transport Governance: A new board was appointed at BDZ Holding to ensure continuity ahead of a future selection procedure.

Entrepreneurship & Automation: Sofia entrepreneur Dimitar Petrov says his autonomous AI robot coffee kiosk is serving 200+ cups a day 24/7 and turning net profits of over €4,200 a month, aiming for payback in under nine months. Consumer Prices: Bulgaria’s annual inflation accelerated to 5.1% in August (from 4.4% in July), with euro-area inflation at 3.3%, driven mainly by energy costs. Public Finance: The Finance Ministry expects Bulgaria’s cash-basis budget deficit to reach about EUR 3bn by end-August, pressured by NRRP investment payments ahead of the Aug 31 eligibility deadline. Energy & Fuel Costs: The Petroleum and Gas Association warns fuel supply won’t be a problem, but diesel prices may stay elevated as European refining capacity and regional supply dynamics tighten. Logistics & State Services: Transport Minister Georgi Peev says Bulgarian Posts needs better use of equipment, more tech (less manual work), and improved pay and staffing, with plans like POS terminals and barcode scanners. Investment & Industry: Economy Minister Alexander Pulev points to rising investor interest in Stara Zagora, highlighting EU-backed support for industrial zones including Industrial Park Zagore–Elenino. Food Safety: Bulgaria’s Food Safety Agency blocked 16.3 tonnes of Turkish table grapes due to pesticide residues above EU limits. Politics & Business Climate: Youth delegates to the UN met President Iliana Iotova to discuss pessimism among young people and priorities like peace and security. EU-Australia Trade: The Bulgarian Chamber of Commerce and Industry will co-organize an EU-Australia business forum in Sofia on Oct 7, targeting sectors from clean energy to pharma and agri-food.

Presidential Race: Bulgaria’s former interim PM Andrey Gyurov confirms he will run for president on Oct 25, pairing with Georgi Kandev as vice-president, positioning a pro-EU, reformist campaign focused on an “economy of knowledge.” Pension Reform: From Sept 1, Bulgarians can choose how their second-pension savings are managed under the new multi-fund model starting Jan 1, 2027, with automatic allocation by age if no choice is made. Infrastructure & Justice: Regional Development Minister Ivan Shishkov says Hemus Motorway construction will speed up toward Veliko Tarnovo, while the whole project remains “in the prosecutor’s hands” over alleged illegal works and financing. Business & Trade: The Bulgarian Chamber of Commerce and Industry will co-organize an EU–Australia business forum in Sofia on Oct 7, highlighting opportunities in clean energy, digital/AI, pharma, agri-food and education. Logistics & Services: Transport Minister Georgi Peev calls for modernization at Bulgarian Posts, citing low pay, staffing issues, and underused technology, with plans like POS terminals and better scanners. Energy Prices: BPGA warns Bulgaria has enough fuel, but diesel pricing depends on international markets as European refining capacity shrinks and supply shifts. Digital Innovation Funding: Three Bulgarian European Digital Innovation Hubs will receive nearly EUR 6m extra to expand AI and tech services for SMEs and public bodies. Inflation Watch: Eurozone inflation hits 3.3% in August, driven by energy costs, keeping pressure on ECB rate expectations. Consumer Pressure: Ikea announces a €1.2bn Europe-wide price-cut push to spur demand amid tighter household budgets, with Bulgaria linked via franchise operations.

Border & Travel Flows: Bulgaria’s border traffic stayed heavy as Turkey’s Edirne gates logged about 3.7m passengers and 1m vehicles since June 22, with average waits cut to 27 minutes (down from 39% last year) after coordination with Bulgarian authorities; peak delays still hit up to two hours on busy midweek days. Macroeconomy: Bulgaria’s budget deficit narrowed to EUR 2.201bn (1.8% of projected GDP) at end-July, with the fiscal reserve at EUR 8.525bn, while Inflation: consumer prices rose 5.1% y/y in August (from 4.5% in July), driven mainly by faster transportation costs. Energy & Environment Administration: the Environment Ministry outlined plans to reorganize 15 Regional Inspectorates of Environment and Water and shift water enforcement from Basin Directorates to the new structures. EU/Regional Security & Connectivity: Bulgaria’s FM said Bulgaria is ready to work with Romania for a safer Black Sea and better connectivity, highlighting the Maritime Security Hub and transport links. Business & Startups: Sofia-based DiscreteStack raised EUR 800k, positioning itself as a European alternative to US AI infrastructure providers. Food & Markets: Tsarevo fishermen warned that a strong bonito season could still crush prices and squeeze margins as costs stay put. Culture & Tourism: Burgas presented its bid for European Capital of Culture 2032 at Apollonia, framing it as a community-driven project.