Bulgaria Economic Forecast

Bulgaria Economic Outlook

February 5, 2019

The economy seemed to gain traction in the final quarter of 2018, following a disappointing third quarter which saw growth slow to a near four-year low due to a plunge in exports. Industrial production growth, on average, remained modest in October–November although still above the Q3 average, pointing to somewhat more upbeat economic activity in Q4. On the demand side, although the unemployment rate inched up in the quarter, the labor market remains tight. This, together with firm wage growth and easing inflation at year-end likely buoyed private consumption in Q4, as evidenced by surging retail sales in the first two months of the quarter. Meanwhile, according to preliminary fiscal data, the double-digit annual growth in revenues in 2018 likely enabled the government to achieve a budget surplus for the third year in a row.

Bulgaria Economic Growth

Growth is expected to remain broadly stable this year, largely driven by healthy domestic demand. Rising wages, in part influenced by planned public sector wage hikes, coupled with easing inflation should bolster private consumption. In addition, a planned increase in public infrastructure spending and improved absorption of EU structural funds are seen supporting fixed investment. Although increased export activity is also seen contributing to growth, it remains vulnerable to the effects from a global trade slowdown or waning demand from the EU and Turkey. FocusEconomics analysts expect growth of 3.3% in 2019, down 0.1 percentage points from last month’s forecast, and 2.9% in 2020.

Bulgaria Economy Data

20132014201520162017
Population (million)7.27.27.27.17.1
GDP per capita (EUR)5,7845,9376,3306,7767,141
GDP (EUR bn)41.942.845.348.150.4
Economic Growth (GDP, annual variation in %)0.91.33.63.93.6
Consumption (annual variation in %)-2.52.74.33.54.8
Investment (annual variation in %)0.33.42.7-6.63.8
Industrial Production (annual variation in %)-0.21.82.92.73.4
Retail Sales (annual variation in %)3.810.211.86.13.7
Unemployment Rate11.810.710.08.07.1
Fiscal Balance (% of GDP)-0.4-5.5-1.60.20.9
Public Debt (% of GDP)17.027.026.029.025.4
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)1.30.10.02.34.5
Current Account Balance (EUR bn)0.50.00.01.12.3
Trade Balance (EUR billion)-2.9-2.8-2.6-1.0-2.1
Exports (EUR billion)21.221.021.923.125.8
Imports (EUR billion)24.223.824.524.127.8
Exports (annual variation in %)7.8-0.94.25.411.5
Imports (annual variation in %)2.0-1.43.1-1.815.5
International Reserves (EUR)14.416.620.323.923.7
External Debt (% of GDP)88.091.974.071.166.0

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Bulgaria Facts

ValueChangeDate
Bond Yield0.880.0 %Feb 14
Exchange Rate1.74-0.72 %Feb 14
Stock Market581-0.35 %Feb 14

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