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Bulgaria GDP Q2 2021

Bulgaria: GDP records best reading in over 20 years in Q2

A second reading confirmed that GDP bounced back in the second quarter, expanding 9.9% and contrasting the 1.8% contraction recorded in the first quarter. Q2’s reading marked the best result since Q4 2000, although it was boosted by a considerable base effect, with Q2 2020 having coincided with the sharpest contraction recorded in over 20 years. On a seasonally-adjusted quarter-on-quarter basis, economic growth moderated to 0.6% in Q2 from 2.5% in the previous quarter.

The upturn in annual terms reflected improvements in the domestic economy. Total consumption growth accelerated to 6.2% year-on-year in the second quarter (Q1: +2.5% yoy), while fixed investment growth came in at 4.0% in Q2, up from the 1.0% expansion logged in the previous quarter. However, government consumption growth fell to a five-year low, clocking in at 3.1% in Q2 (Q1: +6.7% yoy).

Externally, exports of goods and services rebounded in Q2, growing 20.4% (Q1: -5.9% yoy). In addition, growth in imports of goods and services accelerated to 28.4% in Q2 (Q1: +1.9% yoy), marking the highest reading since Q1 2004.

Looking ahead, GDP growth is expected to slow in Q3 and into Q4 as the favorable base effect gradually reduces. Moreover, the caretaker government recently extended the state of emergency until end-November, while spiking daily Covid-19 cases amid a sluggish vaccination campaign bode poorly for activity towards the end of 2021.

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