EC cuts Bulgaria's real GDP growth forecast to 0.5% in 2013, 1.5% in 2014

By bne IntelliNews November 5, 2013

The European Commission cut its projections for Bulgaria's real GDP growth to 0.5% in 2013 and 1.5% in 2014. The latest projections, part of the EC's Autumn Forecast, were revised down from 0.9% and 1.7% respectively in the spring edition of the forecast. Both estimates are slightly below the Bulgarian government's outlook for the period, according to which economic growth will be 0.6% this year and 1.8% in 2014.

In the first half of 2013, Bulgaria registered a mild economic expansion of 0.25%, driven by net exports and increasing public expenditure, while household consumption contracted. The restructuring of the economy towards the export sector is expected to lessen in the second half of the year. Instead, growth will be promoted by strengthening private consumption, as indicated by the rise in retail trade in July and August.

According to the EC, a rise in activity by end-2013 will render positive effects in 2014 as well. In the next couple of years, growth will be support by higher household consumption and private investment, the Commission said. This forecast assumes that the slight improvements in the labour market achieved so far will be sustained over the coming years.

The main downside risk to the forecast is related to the household consumption, which may prove weaker than expected due to fragile labour market and lower propensity to consume.

Unemployment is expected to be 13% in 2013, with the prospect of decreasing to under 12% by 2015.

Inflation is seen averaging 0.5% in 2013 but price growth will slightly accelerate to 2% in 2015 as the base effects from the currently low energy prices fades off.

  Spring Forecast'13 Autumn Forecast'13
  2013 2014 2013 2014
GDP (%, y/y) 0.9 1.7 0.5 1.5
   private consumption 1.4 2.5 -0.3 1.3
   public consumption 3.3 3.3 3 2.2
   gross fix cap. formation 3 3.1 2.1 2.4
Exports (%, y/y) 2.8 4.5 4.9 3.4
Imports (%, y/y) 4.3 5.8 4.1 3.7
HCPI 2 2.6 0.5 1.4
Unemployment 12.5 12.4 12.9 12.4
CA balance, % of GDP -2.6 -3.6 0.3 0
General budget balance, % of GDP -1.3 -1.3 -2 -2
Source: EC        

Related Articles

Bulgarian prosecutors file indictment against defence minister

The Sofia city prosecutor’s office filed indictment with Sofia city court against outgoing Defence Minister Nikolay Nenchev over his alleged failure to ensure aviation safety and the ... more

Bulgaria’s former justice minister launches anti-corruption party

Bulgaria’s former Justice Minister Hristo Ivanov will lead the newly formed Yes Bulgaria party as it prepares to compete in the upcoming general election on an anti-corruption platform.  ... more

Belgium’s KBC buys United Bulgarian Bank and Interlease for €610mn

Belgian-based KBC Group said on December 30 that it is acquiring United Bulgarian Bank (UBB) and Bulgarian leasing ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss