OECD expects Bulgaria’s economic growth to pick up to 2.3% in 2024

Bulgaria’s economic growth will pick up to 2.3 per cent in 2024 and 2.8 per cent in 2025, before easing to 2.6 per cent in 2026, the Organisation for Economic Cooperation and Development (OECD) said in its Economic Outlook report on December 4.

Activity has been supported by higher wages and government transfers to households, the OECD said.

“Real growth is expected to pick up, as inflation slows with the diminishing impact from the energy shock,” it said.

‘Investment has been subdued but will pick up as the rollout of EU funds resumes.”

Exports are expected to recover due to improving conditions in the European economy.

Inflation has been slowing, but wage pressures remain elevated, the OECD said.

The report said that a prolongation of political uncertainty ‘would place planned reforms and investments at risk’.

Interest rate developments will continue to track those in the euro area, in line with currency board and future euro membership, which is assumed to occur in 2026.

Public sector wage rises and increased social spending have widened the fiscal deficit.

A modest fiscal consolidation is warranted to reduce demand pressures and maintain prudent public finances.

“Implementing Recovery and Resilience Facility projects and reforms would unlock EU funds and boost investment,” the OECD said.

“Activation policies, with better support for those returning to Bulgaria, a revamp of the social welfare system and improved skills investments would help to boost labour supply,” it said.

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