According to the latest autumn forecast of the European Commission (EC), Bulgarian GDP is expected to show a 1.7% growth in 2015.
This growth rate is significantly below the expectations of the Bulgarian Ministry of Finance, the estimations of which were set at 2.1%. The same tendency appears to be present in the forecasts for the entire three-year period; EC is planning GDP to increase by 1.5% in 2016 and 2% in 2017, while the Government expects growth of 2% and 2.5% respectively.
One of the main reasons for the expected decrease of GDP in 2016 compared to 2015 is the delay of the absorption of EU funds. This fact, along with exports and lower fuel prices, will be the engine of the growth in 2015. On the other hand, the increase of domestic demand is a prerequisite for the expected growth in 2017. The export prognoses are stable, mainly due to high demand from European Union (EU) countries.
The export sector will support the employment market over the next two years. This, along with the aging of the population, will lead to a decline of the unemployment in Bulgaria from 10.1% in 2015 to 8.8% at the end of the period recorded in the forecast.
Investments in Bulgaria are expected to remain almost unchanged; a slight rise by 0.2% in 2015 is expected, but a drop of investment activities by 2.4% in 2016 is foreseen in the EC report. In 2017, the growth of the investments is expected to rise to 1.7%, while for the entire EU it is forecast to average a growth rate of 2.9% in 2015.
Brussels also forecasts gradual growth of the public debt of Bulgaria in the next two years – from 31.8% in 2015, the debt will increase to 32.8% in 2016 and 33.6% in 2017.
The report concludes that economic recovery in the Eurozone and throughout the EU (currently in its third year) will continue in the near future.
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