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Bulgaria Economic Forecast

Bulgaria Economic Outlook

Annual economic growth decelerated in Q1 2023, according to a flash release. Softer growth in private spending and exports dampened Q1’s reading amid deeper consumer pessimism, still-strong inflation and muted activity among key trading partners. In Q2, GDP growth is likely cooling further. In April–May, business confidence worsened from Q1, consumer sentiment remained pessimistic, and higher interest rates likely weighed on spending and investment. That said, inflation in April fell to a 14-month low, offering some relief to households’ budgets. In politics, the prospects of government formation are waning. After center-right party GERB’s first mandate recently failed, President Radev handed the second mandate to the pro-Western coalition PP-DB on 29 May. However, he advised them not to fulfill the mandate, sparking protests and threatening to extend an already protracted political crisis.

Bulgaria Inflation

In April, inflation fell to 11.6% (March: 14.0%) on falling prices for transport and softer price pressures for food. The Consensus is for average inflation to cool sharply this year on lower commodity prices, weaker domestic demand and a high base effect. Renewed energy uncertainty this winter and a stronger-than-expected economy pose upside risks.

This chart displays Economic Growth (GDP, annual variation in %) for Bulgaria from 2013 to 2022.

Bulgaria Economic Data

2017 2018 2019 2020 2021
Population (million) 7.1 7.0 7.0 6.9 6.8
GDP (USD bn) 59.2 66.3 68.9 70.3 84.0
GDP per capita (USD) 8,401 9,476 9,912 10,158 12,285
GDP (EUR bn) 52.5 56.2 61.6 61.6 71.1
GDP per capita (EUR) 7,450 8,032 8,856 8,911 10,392
GDP (BGN bn) 102.7 110.0 120.4 120.6 139.0
Economic Growth (Nominal GDP, ann. var. %) 7.7 7.0 9.5 0.1 15.3
Economic Growth (GDP, ann. var. %) 2.8 2.7 4.0 -4.0 7.6
Domestic Demand (ann. var. %) 3.7 5.5 4.9 0.1 7.8
Private Consumption (ann. var. %) 2.5 3.6 5.9 -0.5 8.7
Government Consumption (ann. var. %) 4.3 5.4 2.0 8.3 0.4
Fixed Investment (ann. var. %) 3.2 5.4 4.5 0.6 -8.3
Exports (G&S, ann. var. %) 5.8 1.7 4.0 -10.4 11.0
Imports (G&S, ann. var. %) 7.4 5.8 5.2 -4.3 10.9
Industrial Production (ann. var. %) 3.4 0.3 0.5 -5.9 9.8
Retail Sales (ann. var. %) 6.4 5.5 9.3 -2.7 12.2
Unemployment (% of active population, aop) 7.2 6.2 5.2 6.1 5.3
Fiscal Balance (% of GDP) 1.6 1.7 2.1 -3.8 -3.9
Public Debt (% of GDP) 25.1 22.1 20.0 24.5 23.9
Money (ann. var. of M2 %) 7.7 8.9 9.9 10.9 10.7
Inflation (CPI, ann. var. %, eop) 2.8 2.7 3.8 0.1 7.8
Inflation (CPI, ann. var. %, aop) 2.1 2.8 3.1 1.7 3.3
Inflation (PPI, ann. var. %, aop) 5.0 4.0 3.1 -1.9 15.3
Base Rate (%, eop) 0.00 0.00 0.00 0.00 0.00
Annual Effective Interest Rate (%, eop) -0.33 -0.36 -0.55 -0.68 -0.64
Stock Market (ann. var. of SOFIX %) 15.5 -12.3 -4.4 -21.2 42.0
Exchange Rate (BGN per USD, eop) 1.63 1.71 1.74 1.60 1.72
Exchange Rate (BGN per EUR, eop) 1.96 1.96 1.96 1.96 1.96
Current Account Balance (EUR bn) 1.7 0.5 1.1 0.0 -1.3
Current Account Balance (% of GDP) 3.3 0.9 1.9 0.0 -1.9
Merchandise Trade Balance (EUR bn) -0.8 -2.7 -2.9 -1.9 -2.9
Merchandise Exports (EUR bn) 26.9 27.7 29.1 27.3 34.4
Merchandise Imports (EUR bn) 27.7 30.4 32.0 29.2 37.3
Merchandise Exports (ann. var. %) 16.7 2.9 5.0 -6.3 26.2
Merchandise Imports (ann. var. %) 15.1 9.8 5.2 -8.8 27.7
Foreign Direct Investment (EUR bn) 1.5 1.0 1.6 2.8 1.3
International Reserves (EUR bn) 23.7 25.1 24.8 30.9 34.6
International Reserves (months of imports) 10.2 9.9 9.3 12.7 11.1
External Debt (EUR bn) 37.7 37.2 37.7 39.0 41.2
External Debt (% of GDP) 71.8 66.1 61.3 63.3 58.0

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