World Bank maintains Bulgaria’s 2021 GDP growth forecast at 2.6%

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World Bank maintains Bulgaria's 2021 GDP growth forecast at 2.6%

The World Bank said it expects Bulgaria’s real gross domestic product (GDP) to expand by 2.6% this year. This will keep its March projection unchanged.

The country’s economy is forecast to speed up to 3.3% in 2022,

Bulgaria reach its pre-crisis level of real output, and then increase further to 3.4% in 2023. Report is from the World Bank in the June edition of its Global Economic Prospects report published on Tuesday.

Bulgaria’s economic output is estimated to have declined by 4.2% last year, the report showed.

The World Bank noted. The baseline scenario assumes that vaccinations in Bulgaria will gain momentum in the second and third quarters of 2021.  This will gradually help restore consumer and business confidence. With expectations of reduced infection rates in the summer. They expect to increase inoculations in Bulgaria’s main market. The EU, external sales of goods are likely to recover. Tourism is expected to remain below pre-crisis levels.

In Central Europe, which includes Bulgaria, Croatia, Hungary, Poland, and Romania, growth is projected at 4.6% in both 2021 and 2022, supported by a recovery in trade.

“Exceptional policy accommodation is expected to continue through 2021, and sizeable EU fund packages for member states should help mitigate weakness in investment,” the World Bank said.

Growth in the Western Balkans region

Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia, and Serbia forecast to rebound to 4.4% this year. Next year 2022 to moderate  3.7%.  Assuming consumer and business confidence revives as vaccination takes place and political instability eases.

Like many other developed countries, Bulgaria has faced widening fiscal deficit due to the pandemic-induced crisis over the past year. The fiscal reserve’s erosion is the unavoidable result of reduced revenues’ and increases spending’s combined effect. Such a downward trend has led many to question public finances’ soundness and the government’s ability to manage the reserve. Moreover, as a caretaker cabinet replaced the previous executive after inconclusive elections scrutiny has intensified in May–June 2021.