Bulgaria: Economy drops at a milder rate in Q1
June 8, 2021
A second reading confirmed that GDP slid at a milder rate of 1.8% in the first quarter, following the 3.8% contraction logged in the fourth quarter of last year. On a seasonally-adjusted quarter-on-quarter basis, economic growth rose to 2.5% in Q1 from 2.2% in the previous quarter.
Q1’s softer annual decline largely came on the back of an improvement in the domestic economy. Total consumption picked up pace, expanding 3.1% in the quarter (previously reported: +2.6% year-on-year; Q4 2020: +0.9% yoy). Moreover, fixed investment rebounded in the period, growing 1.0% (previously reported: +1.2% yoy) and contrasting Q4’s 7.4% contraction.
On the external front, exports of goods and services contracted at a slower pace of 5.9% in the first quarter (previously reported: -6.0% yoy; Q4 2020: -11.2% yoy). In addition, imports of goods and services rebounded, growing 1.9% (previously reported: +0.6% yoy; Q4 2020: -0.8% yoy).
Commenting on potential hurdles for the economic recovery, Rory Fennessy, assistant economist at Oxford Economics, reflected:
“Downside risks stem primarily from the slow vaccine rollout, as Bulgaria’s is the lowest in the EU in terms of population coverage, and the failure of the elections in April to deliver a working majority government, which could pose challenges for the coronavirus policy response.”
Author: Hanna Andersson, Economist