EBRD raises economic growth forecast for Bulgaria to 3.5% for 2017
In a November report, the European Bank for Reconstruction and Development (EBRD) has increased its projection for economic growth in Bulgaria to 3.5 per cent in 2017, from the 3.2 per cent it projected in May.
In the report, on regional economic prospects for countries in which the EBRD operates, it said that after growing 3.9 per cent in 2016, Bulgaria’s economy expanded by 3.6 per cent and 3.9 per cent in the first two quarters of 2017.
Private consumption became the main driver of growth in 2017 as a result of the tight labour market, a 10 per cent year-on-year increase in average wages and growing consumer confidence, the EBRD said.
Government spending remained subdued due to budgetary tightening and the transition to the new EU funds programming period, resulting in budget surpluses in 2016 and the first three quarters of 2017, the report said.
Following three consecutive years of decline, investment grew in 2016-17, driven by the private sector.
As a result of growing domestic demand driving imports, the contribution of net exports to growth turned negative in the first half of 2017.
“In 2017 and 2018, growth will be driven by private consumption and investment, as fiscal consolidation continues and the contribution of net exports to growth remains negative due to strong domestic demand,” the EBRD said.
Overall, Bulgaria’s economic growth is expected to stand at 3.5 per cent in 2017 and 3.2 per cent in 2018.