site.btaThink Tank: Bulgarian Experiences Sustainable Economic Growth, Growing Employment

Sofia, July 31 (BTA) - In mid-2017, Bulgaria's economic growth continues to exceed 3 per cent on an annual basis, according to a report by Industry Watch, entitled Consumption and Lending in Growth: Economic Risks and Challenges 2017-2018", received by BTA on Monday. The main macroeconomic indicators in the eurozone and the European Union reflect positive dynamics overall, the report suggests.

For over two years Bulgaria's economic growth has been at around 3.5 per cent. Unemployment is edging down, employment is growing and the main indicators on the labour market are near their 2007 levels.

For the past several quarters wages have been growing. From the beginning of 2015 until March 2017 Bulgaria reported EU's second highest growth of labour costs (18.7 per cent). This trend reflects the visible shortages in the growing business sectors.

The total disposable income of households has increased, which translated in an increasingly tangible growth in consumption in the past year.

Loan interest rates have decreased by around 2 percentage points in the past twelve months alone, and in recent months lending has picked up pace.

All these factors increase the potential for an ever more tangible growth of household consumption and expansion of investments geared to meet domestic demand.

Between 2010 and 2015 exports drove economic growth during the economic recovery against the backdrop of restricted lending and shrinking jobs. The past three quarters have seen increasingly clear signs of stronger domestic consumption and investments as a source of growth in the next 12 to 24 months.

The trends that have started in the private sector go hand in hand with a projected increase in the next 12 to 24 months of public investments under EU-backed operational programmes, after the steep drop in 2016 and the beginning of 2017, the report says. This will influence the labour market and price of assets.