Bulgaria GDP Q4 2020


Bulgaria: GDP declines at softer pace in Q4

February 16, 2021

According to a flash estimate, GDP slid 3.8% year-on-year in the fourth quarter of 2020, marking a more moderate decline than the 5.2% contraction recorded in Q3, as activity gradually continued to firm.

A preliminary breakdown showed the fourth quarter’s result largely came on the back of a softer contraction in the external sector. Exports of goods and services fell 11.2% on an annual basis in Q4 (Q3: -20.8 yoy), while imports declined 3.9% (Q3: -4.3% yoy).

On the domestic front, however, total consumption swung to contraction in Q4, falling 5.7% and contrasting the previous quarter’s 2.7% expansion. Moreover, fixed investment declined at a more pronounced rate of 7.9% in the quarter, following Q3’s 6.4% contraction.

On a seasonally-adjusted quarter-on-quarter basis, economic growth waned notably in the fourth quarter, slowing to 2.1% from the previous period's 4.3% expansion.

Commenting on the outlook for the Bulgarian economy in 2021, Valentin Tataru, chief Romania economist at ING, reflected:

“Given the electoral context with general elections scheduled for early April, we imagine that some increased fiscal largesse could occur in the first quarter. On top of that, the already approved 10% average increase in public wages starting January 2021 and 5% pension increase starting July 2021 should do just enough to keep private consumption afloat as this sector has taken a severe hit in 2020. However, the policy visibility beyond the elections is quite blurred right now, as the fragmented political landscape makes it difficult to picture a post-election alliance.”

FocusEconomics panelists project the economy to expand 3.2% in 2021, which is down 0.3 percentage points from last month’s forecast, and 4.0% in 2022.

Author:, Economist

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