The National Bank of Bulgaria has set the countercyclical capital buffer at 2.25% for credit risk exposures in Bulgaria during the fourth quarter of 2027, maintaining the existing level to protect banking system resilience against risks from rapid domestic credit growth and an uncertain external environment. Although the credit-to-gross domestic product ratio stood at 77.9% at the end of the second quarter of 2026 and its 14 percentage point negative gap implied a zero benchmark buffer, the central bank judged that this measure did not adequately capture cyclical risks. Its guided discretion approach also considered credit market conditions, indebtedness, real estate and the broader economy. Annual credit growth in the non-government sector accelerated in the first half of 2026, supported by deposit growth, low mortgage rates and stable labor market conditions, while geopolitical tensions, higher energy prices and weaker global growth remained external risks.
National Bank of Bulgaria maintains countercyclical capital buffer at 2.25% for fourth quarter of 2027
The National Bank of Bulgaria has maintained the countercyclical capital buffer at 2.25% for credit risk exposures in Bulgaria during the fourth quarter of 2027. The decision reflects rapid domestic credit growth and external uncertainty, despite a credit-to-GDP gap that implied a zero benchmark buffer.