A big building in Bulgaria

Bulgaria GDP Q3 2020

Bulgaria: Economy contracts at milder rate in the third quarter

According to a flash estimate, GDP declined 5.2% year-on-year in the third quarter—a softer drop than the second quarter’s 8.6% slump—as the gradual lifting of Covid-19 containment measures enabled some recovery in activity.

A preliminary breakdown showed that the third quarter’s more moderate contraction largely came on the back of a notable rebound in total consumption, which expanded 9.3% year-on-year and contrasted Q2’s 0.3% decline. Moreover, fixed investment fell at a softer rate of 5.7% compared to the previous quarter’s 10.9% contraction. On the external front, however, exports of goods and services decreased at a more pronounced rate of 22.3% in Q3, amid still-muted European demand. That said, the decline in imports of goods and services moderated notably to 3.4% (Q2: -19.7% yoy).

On a seasonally-adjusted quarter-on-quarter basis, economic activity bounced back, with GDP growing 4.3% in Q3, contrasting the previous period’s 10.1% contraction.

Looking ahead, in 2021, the economy is set to rebound from its coronavirus-induced contraction this year. Household and capital spending should expand solidly, while a pickup in global demand should support the external sector. Heightened uncertainty and a prolonged health crisis pose key downside risks, however.

Commenting on the outlook, Valentin Tataru, Romania economist at ING, reflected:

“Today’s flash GDP data came a bit like a cold shower, softening our otherwise hopeful stance on Bulgaria’s economic resilience and growth prospects. […] On the bright side, Bulgaria has entered this crisis with ample fiscal space and an almost impeccable track record of fiscal discipline. The recently adopted budget deficit target for 2021 of -3.9% coupled with the permanent planned increase of wages and pensions will help to restore growth and confidence. Under these circumstances, while we do maintain the -4.5% growth forecast for this year, we need to make a relatively important adjustment to next year’s growth forecast, which we now see at 3.0%, versus the initial 4.5%.”

More detailed data will be released on 4 December.

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest