The European Commission Foresees 3.7% Growth in Bulgaria this Year
Economic growth in Bulgaria will remain strong in 2018 and is expected to reach 3.7%, the European Commission's winter economic forecast says.
By comparison, the Bulgarian government predicts growth of 3.9% this year at 4% in 2017. The EC believes that the final estimate for growth in Bulgaria last year will be 3.8 per cent. High consumption in 2017 was driven by strong wage growth due to labor shortages and wage increases in the public sector, economists said in Brussels. In their words, investments in Bulgaria have begun to recover. However, the contribution of exports to GDP growth is decreasing. The reason is the rapid growth of imports due to increased domestic demand.
The main driver of growth over the next two years will continue to be strong domestic consumption, while the contribution of exports is likely to recover only in 2019, say experts from the European Commission. Increased demand will continue to be stimulated by wage increases. Inflation, which has been at negative levels over the past three years, has reversed its trend and reached 1.2% in 2017, primarily as a result of rising prices for energy commodities and utilities, the EC said. Inflation is expected to gradually increase to 1.4% in 2018 and 1.5% in 2019. The main reason is the international oil prices and the increase in disposable household income as a result of the positive development of the labor market.