Bulgaria Sees Modest Foreign Investment in First Half of 2025, Driven by Reinvested Profits
Despite preliminary data indicating a slight dip compared to the previous year, direct foreign investment in Bulgaria reached 849 million euros in the first half of 2025, representing 0.8% of the nation’s gross domestic product (GDP).According to statistics released by the Bulgarian National bank (BNB), the net flow of foreign investment is currently 31.4 million BGN lower than the same period in 2024, though these figures are subject to revision.
The primary driver of foreign direct investment this year has been the reinvestment of profits generated by Bulgarian units of foreign companies – a positive indicator of their continued confidence in the country’s economic prospects. This reinvested profit totaled 1.756 billion euros, a meaningful increase from the 1.236 billion euros recorded during the first six months of 2024.
A considerable 232.9 million euros entered the country in the form of equity, representing direct contributions to the capital of Bulgarian companies and signaling sustained long-term investor interest. This figure is comparable to last year’s, exceeding it by approximately 10 million euros.
However, the BNB data also reveals a notable trend: Bulgarian subsidiaries repatriated 1.141 billion euros in loans to their parent companies during the first half of the year. These funds, initially reported as foreign direct investment, have now exited the country, representing a volume twice as large as loan repayments made during the same period in 2024.
“The outflow of funds through loan repayments is a complex factor,” one analyst noted. “While it reduces the headline FDI figure, it doesn’t necessarily indicate a loss of confidence, but rather a restructuring of capital within multinational corporations.”
Italy, the Netherlands, and Greece were the leading sources of net positive direct investment flows between January and June, contributing 197.3 million euros, 190.7 million euros, and 167.3 million euros respectively. Conversely,Switzerland and Luxembourg accounted for the largest capital outflows,wiht 296.6 million euros and 155.9 million euros leaving the country.
Interestingly, Bulgarian companies themselves invested 244.3 million euros abroad during the same period, demonstrating a growing outward investment trend.The BNB emphasizes that the data remains preliminary and is subject to upward revisions as more data becomes available. However, the current figures offer a nuanced picture of bulgaria’s foreign investment landscape, highlighting the importance of reinvested profits and the impact of intra-company financial flows.
Here’s a breakdown answering the “Why, Who, What, and How” questions:
What: Bulgaria experienced 849 million euros in foreign direct investment (FDI) during the first half of 2025. While slightly down from the previous year, reinvested profits drove the majority of this investment.
Who: The Bulgarian National Bank (BNB) released the data. Key investors came from Italy, the Netherlands, and Greece. Bulgarian companies also increased outward investment.
why: Reinvested profits by foreign companies operating in Bulgaria were the primary driver, indicating continued confidence in the Bulgarian economy. Loan repayments by subsidiaries to parent companies offset some of the gains.
How: FDI was measured through inflows of equity, reinvested profits, and other investments. Outflows were primarily due to loan repayments. The data is preliminary and subject to revision. The trend ended with a net FDI of 849 million euros, a slight decrease from the previous year, but with a significant increase in reinvested profits and outward investment by Bulgarian companies.
