April 6 (SeeNews) – Bulgaria’s finance ministry said it expects the country’s real economy to expand by a real 1.8% in 2023, constrained by worsened external demand and financing conditions and rising interest rates.
The finance ministry’s previous forecast, made in the autumn, put at 1.6% the country’s economic growth in 2023.
For 2024, gross domestic product (GDP) growth is projected at a real 3.3%, slightly lower than the 3.4% forecast made in the autumn, the ministry said in its 2023 Spring Macroeconomic Forecast on Tuesday.
Inflation under the EU Harmonised Index of Consumer Prices (HICP) is expected to ease in 2023, at an annual average of 8.7% and a year-end forecast of 5.6%, on account of a significant reduction in the impact of the food and energy sectors, with energy prices projected to decrease slightly at the end of the year. This compares to the autumn forecast for average inflation of 6.4% in 2023.
Inflation is then seen to further slow down to an annual average of 3.8% next year, 2.8% in 2025 and 2.2% in 2026.
Employment growth for 2023 is expected at 0.4%, unchanged from the autumn projection, primarily due to the overall economic growth slowdown. The ministry’s forecast indicates a decline in Bulgaria’s unemployment rate to 4.1% in 2023, compared to 4.5% planned in the fall, with a prospect to continue going down over the next three years.
The ministry added that it has prepared an alternative macroeconomic scenario, considering potential risks like weaker external demand and declining commodity prices. Under that scenario, GDP growth would be lower in 2023 and 2024, with a slight pickup afterwards. GDP under the alternative scenario would remain below the baseline throughout the forecast period. Inflation would increase slightly in 2023 due to euro depreciation against the dollar but would be lower than the base scenario in the 2024-2026 period.
In 2022, the country’s GDP went up by a real 3.4%, following 4.2% economic growth in 2021, according to preliminary data published by the National Statistical Institute (NSI).
Source : SeeNews
