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C-bank lowers Bulgaria’s GDP growth forecast for 2021 to 3.9%

SOFIA (Bulgaria), Oct.22 (SeeNews) – Bulgaria’s real gross domestic product (GDP) is expected to grow 3.9% in 2021, the central bank said, lowering its previous projection of 4.1% for economic growth This year.

Economic growth should then accelerate to 4.7% in 2022 before slowing to 3.8% in 2023, the National Bank of Bulgaria (BNB) said in the latest edition of its quarterly economic review published on Thursday.

Last month, the National Statistical Institute (INS) said Bulgaria’s GDP grew by 9.9% on an annual basis in the second quarter of 2021, after falling 1.8% in the quarter. previous. The country’s GDP stood at 31.2 billion levs ($ 18.6 billion / 15.9 billion euros) at current prices during the period under review, the INS said at the time.

Real GDP dynamics largely reflect the evolution of net exports and the expected distribution of funds under the national recovery and resilience plan, the central bank noted.

Bulgaria last week submitted to the European Commission its recovery and resilience plan worth 12.9 billion levs, which lays the foundation for the green and digital transformation of the country’s economy in the context of of the objectives of the EU Green Deal. The plan includes 59 investment projects and 46 reforms.

The BNB said it expects domestic demand to make a major positive contribution to growth over the respective period, which will be mainly driven by private consumption. “Investments in fixed capital will have a significant positive contribution to GDP growth in 2022 and 2023, mainly due to the significant public spending expected as part of the national recovery and resilience plan,” added the central bank.

Net exports are expected to have a predominantly negative contribution to the country’s economy over the period 2021-2023.

In its report, the BNB also said that Bulgarian inflation is expected to accelerate to 3.8% by the end of 2021, reflecting the expected significant increase in production costs of companies due to strong price growth. of some basic raw materials as well as rising labor costs and electricity prices.

“We expect increased private consumption to be another factor with a pro-inflationary impact,” the central bank said.

Earlier this year, the BNB said it expects Bulgarian inflation to accelerate significantly to reach 3.5% by the end of 2021, due to a rise in international energy prices and of food.

According to the latest data released by the INS, consumer prices in Bulgaria rose 4.8% year-on-year in September, after an annual increase of 3.7% in August.

(1 euro = 1.95583 levs)

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