The International Monetary Fund (IMF) expects Bulgaria’s economy to grow by 3.9 per cent this year before slowing down to three per cent, according to its latest World Economic Outlook report.
IMF’s economic growth estimate for Bulgaria in 2022 shows a significant change from April, when it projected 3.2 per cent growth this year, followed by acceleration to 4.5 per cent in 2023.
Overall, the report forecast that global growth would slow down from six per cent in 2021 to 3.2 per cent in 2022 and 2.7 per cent in 2023, down from 3.6 per cent the Fund projected for both 2022 and 2022 in its World Economic Outlook report in April.
“The global economy continues to face steep challenges, shaped by the lingering effects of three powerful forces: the Russian invasion of Ukraine, a cost-of-living crisis caused by persistent and broadening inflation pressures, and the slowdown in China,” the report said.
“More than a third of the global economy will contract this year or next, while the three largest economies — the United States, the European Union, and China — will continue to stall. In short, the worst is yet to come, and for many people 2023 will feel like a recession.”
The IMF forecast global inflation would rise from 4.7 per cent in 2021 to 8.8 per cent in 2022, before declining to 6.5 per cent in 2023 and to 4.1 per cent by 2024.
Its inflation forecast for Bulgaria was 12.4 per cent this year, up from 2.8 per cent in 2021, but slowing down to 5.2 per cent in 2023.
“Risks to the outlook continue to be on the downside. Overall, risks are elevated as the world grapples with the impact of Russia’s invasion of Ukraine, a slowdown in economic activity as central banks ramp up efforts to quell inflation, and the lingering pandemic,” the Fund said.
While inflation is increasingly important, companies still saw Covid-19 as the dominant risk and the continued high numbers of Covid-19 mentions in firms’ earnings calls may reflect the pandemic’s lingering effect on labor markets and supply chains, the IMF said.
(Photo: Bruno Sanchez-Andrade)
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