Bulgaria Economic Forecast

Bulgaria Economic Outlook

September 3, 2019

Growth slowed in Q2 as slowing total consumption growth undermined domestic demand. Lackluster retail sales suggest consumer spending took a hit, despite solid wage growth and a falling unemployment rate, owing to downbeat consumer confidence and a marked slowdown in credit extension. Moreover, fixed investment lost steam, due to pessimism among businesses amid the wider European pullback, which was also behind softening export growth and weak industrial production in the quarter. Turning to Q3, consumer confidence improved somewhat and business sentiment turned positive in July, boding well for household spending and investment. However, they both fell back in August, while the unemployment rate inched up in July. On 30 August, Moody’s upgraded the country’s outlook from stable to positive, citing strengthening fiscal metrics and improved growth prospects thanks to ongoing EU integration as main reasons.

Bulgaria Economic Growth

Growth should pick up this year compared to 2018, as a less negative contribution by net exports, especially from Turkey, will more than offset softening domestic demand. Private consumption growth is set to slow, but will remain solid thanks to a tight labor market and low interest rates, which will also sustain investment. A challenging external backdrop clouds the outlook. FocusEconomics analysts project growth of 3.4% in 2019, which is up 0.1 percentage points from last month’s forecast, and 3.0% in 2020.

Bulgaria Economy Data

20132014201520162017
Population (million)7.27.27.27.17.1
GDP per capita (EUR)5,7775,9466,3306,7767,328
GDP (EUR bn)41.942.845.348.151.7
Economic Growth (GDP, annual variation in %)0.51.83.53.93.8
Consumption (annual variation in %)-2.52.74.33.54.5
Investment (annual variation in %)0.33.42.7-6.63.2
Industrial Production (annual variation in %)-0.21.82.92.73.4
Retail Sales (annual variation in %)3.810.211.86.15.4
Unemployment Rate13.310.48.06.75.7
Fiscal Balance (% of GDP)-0.4-5.5-1.70.11.2
Public Debt (% of GDP)17.127.126.229.625.6
Money (annual variation in %)9.01.28.87.67.7
Inflation Rate (CPI, annual variation in %, eop)-1.6-0.9-0.40.12.8
Inflation Rate (HICP, annual variation in %)0.4-1.6-1.1-1.31.2
Inflation (PPI, annual variation in %)-1.3-0.9-1.7-2.94.2
Policy Interest Rate (%)0.020.020.010.00.0
Stock Market (annual variation in %)42.36.2-11.727.215.5
Exchange Rate (vs EUR)1.961.961.961.961.96
Exchange Rate (vs EUR, aop)1.961.961.961.961.96
Current Account (% of GDP)1.31.30.02.63.1
Current Account Balance (EUR bn)0.50.50.01.21.6
Trade Balance (EUR billion)-2.9-2.8-2.6-1.0-0.8
Exports (EUR billion)21.221.021.923.127.0
Imports (EUR billion)24.223.824.524.127.7
Exports (annual variation in %)7.8-0.94.25.416.6
Imports (annual variation in %)2.0-1.43.1-1.815.1
International Reserves (EUR)14.416.620.323.923.7
External Debt (% of GDP)88.291.874.071.165.6

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Bulgaria Facts

ValueChangeDate
Bond Yield0.430.0 %Sep 04
Exchange Rate1.78-0.72 %Sep 04
Stock Market573-0.35 %Sep 04

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