GDP growth is expected to slow to 1.8% in 2023, according to the Ministry of Finance's Spring Macroeconomic Forecast 2023 published on the institution's website on 4 April.
In 2024, GDP growth will accelerate to 3.3%. Easing inflationary pressures will lead to higher household consumption growth. The rise in demand will also have a positive impact on private investment activity, while public investment growth will remain high. Under the influence of the improving external environment, growth in exports of goods and services will accelerate.
GDP is projected to increase by 3.2% and 3% respectively in 2025-2026. Exports of goods and services are projected to accelerate in 2025, followed by a slight slowdown towards the end of the period. The growth rate of imports will remain higher.
Following a recovery in employment in 2022 after the removal of all restrictive measures against COVID-19, annual employment growth is projected to slow to 0.4% in 2023.
In 2024, along with the acceleration in the growth of the Bulgarian economy, the growth in the number of employees is expected to rise by 0.7%, the Finance Ministry forecasts.
Inflation at the end of 2023 is expected to fall to 5.6% and the annual average to be 8.7%. Most of the slowdown will be due to a significant reduction in the contributions of food and energy commodity groups, the latter expected to have even a slight decline in prices at the end of the year. In 2025 and 2026, annual average inflation will continue to slow to 2.8% and 2.2%, respectively.
Finance ministry experts have also developed an alternative, less favourable scenario for the country's economy. More than a year after the start of Russia’s war in Ukraine, the international economic situation remains uncertain and difficult to predict.
In the alternative macroeconomic scenario, a variant of less favourable dynamics of external demand and a greater decline in international commodity prices compared to the baseline scenario is considered. In it, they foresee a lower GDP growth of the country between 0.5 and 0.1 percentage points, lower imports and exports, and an increase in the current account deficit of the balance of payments.