Bulgaria: Economy slows slightly in Q3
December 6, 2016
Bulgaria’s economy lost some momentum in the third quarter of 2016, mirroring the slowdown seen throughout Central and Eastern Europe. Data released on 6 December showed that the Bulgarian economy expanded 3.4% in Q3 compared to the same period of the previous year (previously reported: +3.5% year-on-year), below the 3.6% growth in Q2 and marking the slowest growth rate in six quarters. Q3’s lower growth was largely driven by a drop in fixed investment, while total consumption grew at the slowest pace since Q4 2014 and the country’s external sector improved. With the external sector picking up the slack left as a result of worsening figures for consumption and investment in Q3, Bulgaria remains on course to grow above the regional average in 2016.
Total consumption expanded by a meagre 0.2% in Q3 (Q2: +1.2% year-on-year). Private consumption grew 1.3% (Q2: +2.5% year-on-year) while government consumption shrank 1.6% (Q2: -2.2% year-on-year). Fixed investment worsened from a 0.1% contraction in Q2 to a 1.8% decrease in Q3.
On the external side of the economy, exports improved from a 4.5% expansion in Q2 to a 9.5% increase in Q3. Imports also accelerated from a 2.8% increase in Q2 to a 7.5% rise in Q3. As a result, the external sector’s net contribution to economic growth rose slightly from plus 1.0 percentage point in Q2 to plus 1.1 percentage points in Q3.
Author: Oliver Reynolds, Economist