The European Commission’s summer forecast for the EU economy, released on July 7, raised the estimate for Bulgaria’s economic growth this year to 4.6 per cent, but lowered its projection for 2022 to 4.1 per cent.
In its previous spring forecast, the Commission had estimated 3.5 per cent gross domestic product (GDP) growth in 2021 and 4.7 per cent in 2022.
“The upward revision in 2021 reflects mainly the strong recovery in the first quarter of this year, while strong base effects explain the downward revision in 2022,” the EC said.
The Commission said that Bulgaria’s real GDP grew by 2.5 per cent in the first quarter of the year despite restrictions imposed to limit the second and third Covid-19 wave in the country, driven by exports and private consumption.
“Consumer confidence reached pre-crisis levels in April and May, suggesting further improvements in domestic consumer demand this year,” according to the forecast, which noted that exports were expected to “follow the favourable developments in external demand and the lifting of containment measures”.
The EC said that the risks to the forecast were broadly balanced, with a possibility consumer demand could prove stronger than projected. On the downside, given the relatively slow rate of COVID-19 vaccination in Bulgaria, restrictions may have to be re-introduced again down the line.
The Commission raised its growth estimates for EU and euro area in the summer forecast to 4.8 per cent this year and 4.5 per cent in 2022. Compared to the previous forecast in the spring, the growth rate for 2021 was “significantly higher” in the EU (up 0.6 percentage points) and the euro area (up 0.5 percentage points), while for 2022 it is slightly higher in both areas (up 0.1 percentage points).
“The EU economy is set to see its fastest growth in decades this year, fuelled by strong demand both at home and globally and a swifter-than-expected reopening of services sectors since the spring,” European economy commissioner Paolo Gentiloni said. “With the Recovery and Resilience Facility taking off, Europe has a unique opportunity to open a new chapter of stronger, fairer and more sustainable growth.”
(Photo: Steve Ford/sxc.hu)
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