Moody's sees Bulgaria's economic growth at 1.2% in 2013

By bne IntelliNews July 3, 2013

Moody's expects Bulgaria's GDP to grow 1.2% in 2013 on the back of higher exports, the finance ministry reported, citing the agency's annual credit report on Bulgaria. This projection is slightly higher than the recently revised forecast of the Bulgarian government for 1% economic growth in 2013.

The country's budget deficit-to-GDP ratio is seen rising to around 1.4% in 2013 from 0.8% in 2012 due to increased social spending, an anaemic expansion in industrial output, high unemployment rate and subdued domestic demand.

We remind that the Bulgarian government plans to revise this year's budget on the back of worsened economic outlook. The deficit target level of 1.3% of the full-year GDP set in the 2013 budget law will likely be raised due to reduction in the revenue forecast and higher  social expenditure planned. It will however remain below the 3% ceiling, the finance minister confirmed.

The budget deficit will narrow to 1.3% of GDP in 2014 as an acceleration in economic growth is likely to be offset by continued pressure on the government to increase social spending, according to Moody's. The GDP growth for 2014 is seen at 2.4%.

Bulgaria's low indebtedness (relative to its euro area peers) is the major reason behind the high assessment of the government's financial strength, Moody's noted. The agency assesses the country's fiscal and monetary policies as prudent and banking supervision as effective.

The agency said that the developments in the labour market (declining staff numbers and rising wage levels) will continue to hinder the private demand recovery.

Moody's assesses Bulgaria's political risk as low but calls attention to the high public discontent, which could lead to the implementation of populist policies and another snap elections. However, the agency notes that the country's major parties agree on the significance of fiscal stability, low levels of government debt and the currency board.

Related Articles

EU asks CEE to comment on Russian gas promises

The European Commission has invited comments from Central & Eastern European states on proposals put forward by Russian gas giant Gazprom to meet competition concerns. Visegrad and the Baltic ... more

EBRD says 2016 net profit was around €1bn

The European Bank for Reconstruction and Development (EBRD) said it made a net profit of around €1bn in 2016, up by a quarter from the €802mn it made in ... more

New Bulgarian government reports irregularities in defence contracts

A check on public procurement under Bulgaria’s previous centre-right government has revealed dozens of violations in the defence ministry, caretaker Prime Minister Ognyan Gerdzhikov said on ... 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