Bulgaria Economic Forecast

Bulgaria Economic Outlook

October 30, 2018

Available data hints at another strong outturn for domestic demand in the third quarter, on the heels of a solid second-quarter performance. Household spending appears to have remained upbeat, with retail sales notching handsome gains through August and the unemployment rate hitting a fresh one-decade low in September. Moreover, despite a weak extractives sector weighing on gains in industrial output, the manufacturing sector has been recording impressive growth in recent months. Taken together with this year’s heavy absorption of EU structural funding, fixed investment looks set for another robust quarter. Meanwhile, the external sector continued to lose ground though August on waning demand from Europe; stronger imports also helped narrow the eight-month current account surplus significantly from a year earlier. In late October, the center-right government approved next year’s draft budget. Analysts see the government’s proposed boost to public-sector wages and education spending as an effort to shore up support ahead of next year’s European and local elections.

Bulgaria Economic Growth

Household spending is expected to slow next year due to slower employment growth and elevated inflation. That said, fixed investment should continue benefiting from cheap borrowing and strong absorption of EU funding. Meanwhile, a pullback in global trade is likely to curb export growth. Over the medium-term, sound fiscal metrics and an improved business climate should translate into greater FDI inflows. Met the why particular panelists expect growth of 3.5% in 2019, up 0.1 percentage points from last month’s forecast, and 2.8% in 2020.

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 Yield0.930.0 %Nov 15
Exchange Rate1.73-0.72 %Nov 15
Stock Market596-0.35 %Nov 15

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