EU winter economic forecast for Bulgaria cuts 2020 growth estimate to 2.9%
Bulgaria’s real GDP growth is expected to “slow significantly” in 2020, reaching 2.9 per cent, according to the European Commission’s winter economic forecast, released on February 13.
The Commission’s new growth estimate was slightly lower than the three per cent growth it projected in the autumn forecast in November 2019. The growth estimate for 2021 was 3.1 per cent.
The main reason for the slowdown was weaker domestic demand growth, the Commission said.
“Although private consumption is forecast to remain the key growth driver, its contribution to economic expansion is set to decline on the back of lower employment growth. Investment is unlikely to compensate for the slower consumption growth in 2020 and is set to pick up only slightly in 2021, along with somewhat stronger export growth,” the winter forecast said.
But the recent recovery in consumer sentiment could result in better-than-expected private consumption, according to the forecast.
Overall, the European economy remained on a path of steady and moderate growth, according to the Commission. Over the next two years, annual GDP growth in the euro area is expected to settle at 1.2 per cent, the same as in 2019, while the EU economy as a whole was set to grow by 1.4 per cent.
Those estimates for 2020 and 2021 were unchanged compared to the autumn forecast, as more positive developments were counterbalanced by negative events elsewhere, the Commission said.
The winter forecast said that the balance of risks “remains tilted to the downside” – clarity about trading relations between the EU and the UK until the end of 2020 was offset by “considerable uncertainty about the long-term relationship”, while economic and trade-policy uncertainty remained at high levels, especially as concerns the United States.
New downside risks have emerged, the Commission said, including the coronavirus outbreak that raised questions about the short-term economic prospects in China, the surge in geopolitical tensions in the Middle East, as well as Turkey’s gas explorations in the waters off Cyprus, which have fuelled tensions with the EU that are yet to be resolved.
(Photo: Pedro Moura Pinheiro/flickr.com)
