Bulgaria: GDP growth records slowest increase since Q4 2020 in Q4
GDP growth eased to 1.6% year on year in the fourth quarter, from 1.8% in the third quarter. Q4’s reading marked the softest expansion since Q4 2020. On a seasonally adjusted quarter-on-quarter basis, economic growth sped up to 0.5% in Q4, following the previous quarter’s 0.4% increase. Q4’s reading marked the strongest expansion since Q4 2022.
Private consumption growth fell to 3.5% in Q4, marking the weakest expansion since Q3 2022 (Q3: +5.2% yoy). In addition, government consumption growth cooled to 0.5% (Q3: +2.8% yoy). Meanwhile, exports of goods and services declined at a softer rate of 1.9% year on year in the fourth quarter, which marked the best reading since Q1 (Q3: -3.1% yoy). In addition, imports of goods and services fell at a softer pace of 4.4% in Q4 (Q3: -6.9% yoy), marking the best reading since Q1 2023.
Analysts at the EIU commented on the outlook:
“Bulgaria’s economic growth will be moderate in 2024 as high interest rates and low external demand suppress economic activity; nevertheless, with growth of 2% it will remain among the stronger-performing EU economies (significantly above the EU average). […] Private consumption will remain the single largest contributor to growth this year, boosted by strong real wage growth. However, tight monetary conditions will constrain spending, leading to a deceleration in private consumption growth. The biggest drag on growth will be a widening trade deficit on the back of rising demand for imports, growth in which will outpace that of exports. Export growth will be minimal amid weaker growth in Bulgaria’s main EU trading partners, as the EU accounts for two-thirds of the country’s exports.”