The Bulgarian unit of Austrian banking group Raiffeisenbank said on September 8 that it expected the pace of economic growth from the second quarter of 2014 to carry over to the rest of the year.
“The real GDP growth in the second quarter of 2014 was relatively strong at 1.6 per cent on an annual basis,” Raiffeisenbank Bulgaria analyst Emil Kalchev said in the latest Raiffeisen Research monthly note on Bulgaria. “Our expectations are that in the second half of the year, the GDP growth will be similar to that recorded in the first half,” he said.
Last week, Bulgaria’s National Statistical Institute said that the country’s economy grew by 1.6 per cent year-on-year (0.5 per cent compared to the previous quarter), the highest since the third quarter of 2011. In the first quarter, the economy grew by 1.2 per cent on an annual basis.
After shrinking sharply in 2009 as a result of the global financial crisis, Bulgaria’s economy has resumed growth at a steady, if sluggish, pace and is yet to reach the gross domestic product (GDP) figure recorded in 2008 – the economy would need to grow by about two per cent to reach that threshold this year. Last year, Bulgaria’s economy grew by 0.9 per cent.
The now-departed Plamen Oresharski government had targeted 1.8 per cent economic growth for the full year, although international institutions were slightly less optimistic, with the European Commission forecasting 1.7 per cent growth in its spring forecast, while the International Monetary Fund (IMF) said in April that it saw Bulgaria’s economy growing by 1.6 per cent this year.
Other positive developments included decreasing unemployment in the second quarter and higher net foreign direct investment during the same period, while lending grew for a fifth straight month in June, Raiffeisen said. The current account balance showed a surplus in the second quarter of 2014, albeit a smaller one than in the same period of last year.
The main drawback was the large Budget deficit recorded in the first half of the year, which, at 995.6 million leva, equalled 2.8 per cent of the first-half GDP. “This means that the 1.8 per cent of GDP deficit target for 2014 will not be achieved,” Kalchev said.
(Photo: Michael Faes/sxc.hu)