Bulgaria Economic Forecast

Bulgaria Economic Outlook

September 4, 2018

The economy grew robustly in Q2 compared to the same quarter a year earlier, although at a slightly slower pace than in Q1, according to a preliminary estimate released by the Statistical Institute. An increase in total consumption, which grew at the fastest rate in two-and-a-half years, drove growth. This was partly due to an over 6% increase in real household incomes, which benefited from higher wages and salaries on the back of a tightening labor market. Meanwhile, fixed investment expanded at a solid pace in Q2, although less than in Q1, supported by low interest rates and economic optimism among businesses. On the external front, as imports of goods and services increased faster than exports, the external sector weighed slightly on overall economic growth in Q2. Looking towards Q3, while growth is likely to remain robust, there are mixed early signals: In July, the unemployment rate remained at June’s multi-decade low, which is likely to support household spending, while business confidence fell for the first time in nearly two years.

Bulgaria Economic Growth

Household spending should benefit from lower unemployment and strong wage growth this year. Increased EU funding is expected to buttress fixed investment, which should see further support from an improved business climate and low interest rates. Sound fiscal policy should also secure stronger FDI inflows. Met the why particular analysts expect growth of 3.7% in 2018, up 0.1 percentage points from last month’s forecast, and 3.4% in 2019.

Bulgaria Economy Data

20132014201520162017
Population (million)7.27.27.27.17.1
GDP per capita (EUR)5,7845,9376,3306,7767,141
GDP (EUR bn)41.942.845.348.150.4
Economic Growth (GDP, annual variation in %)0.91.33.63.93.6
Consumption (annual variation in %)-2.52.74.33.54.8
Investment (annual variation in %)0.33.42.7-6.63.8
Industrial Production (annual variation in %)-0.21.82.92.73.4
Retail Sales (annual variation in %)3.811.211.86.13.7
Unemployment Rate11.811.711.08.07.1
Fiscal Balance (% of GDP)-0.4-5.5-1.60.20.9
Public Debt (% of GDP)17.027.026.029.025.4
Money (annual variation in %)9.01.28.87.67.7
Inflation Rate (CPI, annual variation in %, eop)-1.6-0.9-0.40.12.8
Inflation Rate (HICP, annual variation in %)0.4-1.6-1.1-1.31.2
Inflation (PPI, annual variation in %)-1.3-0.9-1.7-2.94.2
Policy Interest Rate (%)0.020.020.010.00.0
Stock Market (annual variation in %)42.36.2-11.727.215.5
Exchange Rate (vs EUR)1.961.961.961.961.96
Exchange Rate (vs EUR, aop)1.961.961.961.961.96
Current Account (% of GDP)1.30.10.02.34.5
Current Account Balance (EUR bn)0.50.00.01.12.3
Trade Balance (EUR billion)-2.9-2.8-2.6-1.0-2.1
Exports (EUR billion)21.221.021.923.125.8
Imports (EUR billion)24.223.824.524.127.8
Exports (annual variation in %)7.8-0.94.25.411.5
Imports (annual variation in %)2.0-1.43.1-1.815.5
International Reserves (EUR)14.416.620.323.923.7
External Debt (% of GDP)88.091.974.071.166.0

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Bulgaria Facts

ValueChangeDate
Bond Yield1.000.0 %Sep 20
Exchange Rate1.66-0.72 %Sep 20
Stock Market627-0.35 %Sep 20

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