Bulgaria/September 2014
According to the prognosis of the World Bank, the Bulgarian GDP will grow in 2014 by about 1.7%. The analysis of the institution goes even further as the forecast for the coming year with an estimated increase of 2.4% in 2015; and up to 2.8% growth in 2016. As a comparison, at the beginning of the year the expectations were that the Bulgarian GDP will increase by 2.00%. The report is in alignment with the opinion of the European Commission and is slightly higher than the forecast of the International Monetary Fund.
In the report, Bulgaria is listed in the sub region of the developing countries from Central and East Europe, along with Albania, Romania and Serbia. The expectations are that the economies of these countries will increase mainly by realizing higher export levels mainly to Western Europe, even though this index recorded a drop during the last twelve months. Exporting is the main index that could increase the GDP of the developing countries, due to several reasons such as the politically unstable situation in the region; the high rate of unemployment and the fragile bank systems. Another destabilizing factor is the tension between the European Union and Russia. Additionally, there is the risk that the growth of the economy of Bulgaria will be prevented by both the ageing of the population and the emigration of the younger population. Also, according to the World Bank there are no significant reforms that could increase the investments into Bulgaria.
The advice of the Bank to the Bulgarian experts is to invest more funds faster into the internal structuring reforms, so to be able to stimulate the growth up to a level that will eradicate the poverty in the country.
Meanwhile, the global GDP has decreased from 3.2% to 2.8% with main factor being the situation in Ukraine. The tendency is for the growth of the economies of the developing countries to increase faster than the ones of the ‘rich countries’.
Generally, the opinion of the institution is that the financial stability is improved and financial indexes are extremely good. Nevertheless, the warning of the World Bank is that now is the time for experts to prepare the economies for the next financial crisis.
Donka Pechilkova (donka.pechilkova@eurofast.eu)
Eurofast Global, Sofia Office
Tel: +359 2 988 69 78
Website: www.eurofast.eu