Bulgaria: Economy decelerates slightly in Q1
June 7, 2016
In the first quarter, the economy expanded 2.9% over the same period last year, according to revised data released on 7 June. The print, which matched a preliminary estimate, came in slightly below the 3.0% expansion tallied in the previous quarter and marked the weakest reading in three quarters. Q1’s result mainly reflected that a contraction in fixed investment and government spending partly offset a healthy acceleration in private consumption. The contraction in government spending is a result of the Bulgarian government’s consolidation efforts to decrease of the fiscal deficit this year.
Private consumption recorded a 3.7% expansion in Q1 (Q4: +2.8% year-on-year), which marked the best result since Q1 2014. Conversely, government consumption decreased 4.4% in Q1, which came in below a flat reading in Q4. Moreover, fixed investment swung from a 0.9% increase in Q4 to a 3.9% decrease in Q1, thus marking the steepest fall in almost 15 years.
On the external side of the economy, exports of goods and services decelerated sharply from a 6.1% expansion in Q4 to a 0.3% increase in Q1. Imports swung from a 4.1% increase in Q4 to a revised 1.3% contraction (previously reported: - 2.8% yoy). As a result, the external sector’s net contribution to the economy fell from 1.2 percentage points in Q4 to 1.0 percentage point in Q1.