Bulgarias GDP growth decelerates to 0.8% in 2012.

By bne IntelliNews March 7, 2013
Bulgarias GDP, calculated in seasonally and working-day adjusted terms, expanded by 0.5% y/y in Q4 2012 [unchanged from the flash estimate, released in Feb], according to preliminary data of the national statistical institute. The annual growth decelerated from 0.6% y/y in Q3, 0.7% y/y in Q2 and 0.8% y/y in Q1. Compared to the previous quarter the economy posted zero growth in Q4. On the production side, the agricultural sector registered a 2.3% y/y growth in Q4. The services sector, which has the highest weight, expanded by 3.8% y/y after rising by only 1.4% in Q3, and the industry, posted a 3.7% annual growth in Q4. The construction sector marked the largest decline in Q4, shrinking by 12.6% y/y in Q4. Information and communication, finance and insurance, real estate activities also had a negative contribution to GVA. Adjustments marked 0.9% increase y/y, indicating slightly better indirect tax collection than a year earlier. Domestic demand, which was the major contributor to economic expansion in the boom years prior to the crisis, was the main growth driver in 2012 as well. It went up by 1% y/y in Q4 entirely on the back of private consumption (up 1.3% y/y) while collective consumption stayed at its year-ago level. It should be noted though that the annual growth rate of final consumption has been slowing throughout 2012, which we attribute to unemployment growth, low consumer confidence and rise in precautionary savings. At the same time, the contribution of the external sector was negative as exports decline steepened to 2.1% y/y in Q4. Imports also plunged into negative territory in Q4 after registering growth in the previous three quarters of the year. Investment in fixed capital rose by 1.5% y/y in Q4 after falling by 1.5% in Q3. GDP growth for the whole 2012 stands at 0.8% according to preliminary estimates, in line with the EC's projection and slightly below the projection of the IMF (1%). The growth figure is however lower than the 1.4% forecast of the government. GDP expansion slowed from 1.8% in 2011 mainly as a result of negative contribution of exports, which were a strong growth driver in 2011. Imports were the fastest growing component with a rate of 3.7%. Final consumption growth inched up to 1.8% from 1.5% in 2011. Gross capital formation was only 0.8% above its year-ago level. As expected, the best performing sectors last year were trade, transport and tourism (up 1.8%, significantly below the pre-crisis levels), agriculture (up 3.5%, first annual growth since 2008), industry (up 1.9%, significantly below 2011). The construction, telecommunications and information and the education sectors reported the steepest declines in 2012. Recent economic forecasts: The EC kept Bulgarias real GDP growth forecast at 1.4% in 2013. According to the Commission, domestic demand will be the main growth driver, supported by stable overall domestic economic environment, increase in real incomes and relatively strong public finances upholding consumer confidence. The EBRD sees 1.9% GDP growth in 2013 (the same projection as the one of the Bulgarian government) as fiscal and monetary buffers will withstand further shocks, but weak export demand will keep economic growth modest. The WB lowered Bulgaria's 2013 GDP growth forecast to 1.8% from 2.5% projected in June 2012.
Year GDP Final consumption Household consumption Gross capital formation Exports Imports
2007 106.4 107.2 109.0 111.8 106.1 109.6
2008 106.2 102.6 103.4 121.9 103.0 104.2
2009 94.5 92.7 92.5 82.4 88.8 79.0
2010 100.4 100.5 100.0 81.7 114.7 102.4
2011 101.8 101.5 101.5 93.5 112.3 108.8
2012* 100.8 101.8 102.5 100.8 99.6 103.7
Source: Statistics office, *preliminary data

Bulgarias GDP growth decelerates to 0.8% in 2012.

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