EU spring economic forecast re-affirms Bulgaria 2024 growth forecast at 1.9%
The European Commission’s spring forecast for the EU economy, released on May 15, projected Bulgaria’s economic growth this year at 1.9 per cent, unchanged from the estimate in the winter forecast in February.
At the same time, the Commission raised its economic growth estimate for 2025 to 2.9 per cent from 2.5 per cent.
The EC’s projection was well below the 3.2 per cent growth target set in Bulgaria’s 2024 Budget.
The Commission said that it saw slower growth at the start of this year due to shrinking exports and slower private consumption growth, but was optimistic for the rest of the year, as exports were expected to rebound while consumption growth “is assumed to recover.”
Regarding inflation, the EC said that it expected that the harmonised consumer price inflation would continue to decline. Energy and food prices were the main drivers of the slowdown so far, while “the downward trend in external prices is expected to curb inflation of energy and non-energy industrial goods prices” going forward.
The Commission said that the EU economy grew better than expected at the beginning of the year following broad economic stagnation in 2023, projecting 0.8 per cent growth for the euro zone in 2024 and one per cent for the EU economy as a whole.
In 2025, growth was forecast to speed up to 1.4 per cent in the euro zone and 1.6 per cent in the EU as a whole.
“The EU economy perked up markedly in the first quarter, indicating that we have turned a corner after a very challenging 2023. We expect a gradual acceleration in growth over the course of this year and next, as private consumption is supported by declining inflation, recovering purchasing power and continued employment growth,” EU commissioner for economy Paolo Gentiloni said.
But he also acknowledged that the forecast was “subject to high uncertainty and – with two wars continuing to rage not far from home – downside risks have increased.”
Aside from geopolitical tensions, persistent inflation in the US could lead to delayed rate cuts and tighter global financial conditions, while some EU member states may have to “pursue a more restrictive fiscal stance” in order to reduce budget deficits and debt ratios.
Additionally, the EC spring forecast noted that “risks associated to climate change and the degradation of natural capital increasingly weigh on the outlook. The EU is particularly affected, as Europe is the continent experiencing the fastest increase in temperature.”
(Photo: Pedro Moura Pinheiro/flickr.com)
Please support independent journalism by clicking on the button below. For as little as three euro a month or the equivalent in other currencies, you can support The Sofia Globe via patreon.com and get access to exclusive subscriber-only content:
