The political and economic changes that followed the fall of communism in Central and Eastern Europe more than two decades ago have stalled and incomes in the region may never match those in Western Europe, the European Bank for Reconstruction and Development said Wednesday.

In its most sobering assessment ever, the EBRD said that while five years of "substandard" growth since 2008 largely reflects the impact of the financial crisis and the euro-zone crisis that followed, the weakness of the region's long-term growth prospects is much-more deeply rooted.

The development bank said that while most of the economic measures that are needed to boost growth are easy to identify, inadequate political institutions and strong vested interests have prevented their adoption.

In its section on Bulgaria EBRD forecast weak growht in the short term.

“The outlook is constrained by developments in the eurozone, given the close trade, financial and investment links. Economic growth this year is expected to be positive, but slightly lower than in 2012 because of weak internal demand.“

However, Bulgaria’s medium-term growth potential remains good: GDP per capita (adjusted for purchasing power standards) is estimated by Eurostat to be less than half of the EU average, so the scope for convergence is still quite high, provided that structural reforms are pursued, EBRD said.

FULL text of the section on Bulgaria READ HERE

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