Bulgaria: Economic growth slows in the third quarter
December 7, 2021
A second reading confirmed that the economy lost momentum in the third quarter, expanding 4.6% and slowing from the 7.1% increase recorded in the second quarter. On a seasonally-adjusted quarter-on-quarter basis, economic growth moderated to 0.6% in Q3 from 0.8% in the previous quarter.
The slowdown in annual terms reflected slower growth in the domestic economy, partially attributable to a less favorable base effect compared to Q2. Total consumption growth eased to 6.8% year-on-year in the third quarter (Q2: +8.2% yoy), while fixed investment contracted at a sharper rate in Q3, shrinking 9.7% (Q2: -6.1% yoy). However, government consumption growth rose to 6.3% in Q3 from 1.4% in Q2.
Externally, growth in exports of goods and services slowed to 9.8% in Q3 after Q2’s 21.1% surge. In addition, growth in imports of goods and services eased to 12.7% in Q3 (Q2: +22.0% yoy).
Looking ahead, GDP growth is expected to slow further in Q4 as the favorable base effect gradually reduces. Moreover, the extension of the state of emergency amid surging daily Covid-19 cases in October–November will likely have weighed on activity in the final quarter of 2021.
Author: Stephen Vogado, Economist