EU Commission Forecasts Bulgarian Economy to Grow by 1.5 % in 2016, 2 % in 2017

Politics » BULGARIA IN EU | November 5, 2015, Thursday // 16:27
Bulgaria: EU Commission Forecasts Bulgarian Economy to Grow by 1.5 % in 2016, 2 % in 2017 Pierre Moscovici, the EU Commissioner in charge of Economic and Financial Affairs, speaks at a news conference at the EU Commission headquarters in Brussels, Belgium, 05 November 2015. Photo: EPA

In its latest Autumn Economic Forecast, which was released on Thursday, the European Commission (EC) foresees the Bulgarian economy to grow by 1.7 % in 2015.

In 2016, the EC expects Bulgaria's real GDP to increase by 1.5 %, which is lower than the economic growth of 2.1 % forecast by the government.   

In 2017, the EC forecasts economic growth of 2 %, which will be largely due to the expected increase in domestic demand.

The Commission notes that the Bulgarian economic growth in 2015 has been mainly driven by exports and the falling oil prices, but growth-supporting factors including the absorption of EU funds are expected to lose their strength next year.

Total investments in Bulgaria are expected to increase by 0.2 % in 2015, but a drop of 2.4 % is forecast next year before returning to a growth of 1.7 % in 2017.

Employment will register a slight growth of 0.3 % this and next year and 0.5 % in 2017, while the unemployment rate will steadily decline from 10.1 % in 2015 to 9.4 % in 2016 and further down to 8.8 % in 2017.

The EC forecasts a deflation of 0.8 % in 2015, with inflation expected to return in the next two years, reaching levels of 0.7 % in 2016 and 1.1 % in 2017.

The current account surplus is expected to steadily decrease from 1.4 % in 2015 to 1.3 % in 2016 and further down to 0.9 % in 2017.

The budget deficit wll decrese only slightly from 2.8 % in 2015,  to 2.7 % in 2016 and 2017, the figure for next year being higher than the deficit of 2 % forecast by the government.

The general gross debt is forecast to increase steadily from 31.8 % in 2015 to 32.8 % in 2016 and further up to 33.6 %.

The pace of private consumption is expected to grow from 0.7 % in 2015 to 1.4 % in 2016 and further up to 1.7 % in 2017.

The Commission noted that the economic recovery in both the EU and the eurozone is now in its third year.

It is expected to continue at a modest pace next year despite the more challenging conditions in the global economy.

In 2015, the economic recovery has been resilient and widespread across member states thanks to factors such as decreasing oil prices and a relatively weak external value of the euro. Nevertheless,  it remained slow.

Real GDP in the EU-28 is expected to grow from 1.9 % in 2015 to 2 % in 2016 and further up to 2.1 % in 2017.

In the euro area, real GDP is forecast to increase by 1.6 % in 2015, growing to 1.8 % in 2016 and further up to 1.9 % in 2017.

The EC expects the refugee influx to have a small, positive economic impact in the medium term.

The Commission will update its economic forecast in February 2016.

Check out the complete Autumn 2015 Economic Forecast here.

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