WB cuts Bulgarias growth forecast to 0.6% in 2012.

By bne IntelliNews June 14, 2012
The World Bank (WB) projects that Bulgarian economy will grow by 0.6% in 2012, according to the June edition of the Global Economic Prospects report. The forecast has been cut from previously expected 1.2%. In 2013, the economic growth will rebound to 2.5% and further to 3.3% in 2014. One of the risks that Bulgaria faces is deleveraging by high-income European banks and particularly deleveraging by Greek-owned banks, which have a large presence in the country. In 2011, GDP in developing Europe and Central Asia, the group that Bulgaria falls into, expanded by an estimated 5.6%, despite the renewed financial turmoil and weakening Euro Area demand in late 2011. Regional GDP growth will however slow to 3.3% in 2012 due to renewed tensions in the EU area, capacity constraints and deleveraging by European banks. In Q1, Bulgarias economy expanded by a real 0.5% on the year but remained flat from the previous three months. Bulgarias GDP rose by 1.7% in 2011 and the government expects the growth to slightly ease to 1.4% this year. In May, the EC revised Bulgarias real GDP growth forecast downwards to 0.5% this year from 2.3% in the autumn report due to deteriorated EU economic prospects and the spill-over effects to the Bulgarian economy.

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