For Bulgaria a Steady Moderate Growth of the Economy is Expected, the European Commission Said

Politics » DOMESTIC | May 8, 2019, Wednesday // 07:47
Bulgaria: For Bulgaria a Steady Moderate Growth of the Economy is Expected, the European Commission Said

We expect Bulgaria's economic growth to recover, albeit limited by declining demand for its foreign markets, shortage of employees and cooling of consumer attitudes, the European Commission said.

The spring forecast for the 27 European Union countries (excluding the UK), spread today in Brussels, is slightly better than the winter forecast. The calculations show an expected 2018 growth estimate of 3.1% of GDP, which is less than the 3.5% (2015), 3.9% (2016), and 3.8% (2017) levels in the previous three years. But this and next year are expected to slightly improve the pace to 3.3% and 3.4% of GDP.

Exports will recover from last year's retreat, and if there are no external price shocks, inflation will remain within 2.6 - 1.8 percent.

The depreciation of the leva was mainly caused by rising energy prices last year. In the first half of 2019, inflation will continue to grow because of the richer food and relatively higher international prices, according to the European Commission. Therefore, at the end of 2019, it is estimated that it will not exceed 2%.

Employment should slowly grow by about 0.1% in each of the three years between 2018 and 2020. So next year, unemployment is projected to fall below the token limit of 5% and decline to 4.8% of the working population, which is almost twice less than the data for 2015 (9.2%).

The budget will continue to account for a surplus, and public debt will decline, with the risks to economic growth being broadly balanced. The good news is that private consumption may increase faster than expected, as long as consumer confidence is improved and labor market tightening continues, which is why employers are forced to offer higher wages in search of staff. On the other hand, dangers may have a sharp contraction in the demand for the main export markets in Bulgaria.

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