Bulgaria’s GDP growth is expected to decelerate further to 1.3 per cent in 2023, before bouncing back to 2.9 per cent in 2024, the European Bank for Reconstruction and Development (EBRD) said in its latest Regional Economic Prospects report, released on May 16.
Economic growth in Bulgaria decelerated to 3.4 per cent in 2022, with negative investment and net export growth rates weighing on economic performance for the second consecutive year, as financing conditions have tightened and new tranches of the EU funds under the RRF programme have been delayed, the EBRD said.
Investment is expected to pick up, as projects from the recovery plan should gather steam, supported by the positive outlook related to Bulgaria’s euro area accession which is anticipated in 2025, and improved political stability.
The HICP (harmonised index of consumer prices) inflation rate peaked in September 2022, at 15.6 per cent, and dropped to 12.1 per cent in March 2023.
Falling inflation will support the recovery of real wages and the purchasing power of households, the EBRD said.