site.btaEBRD Revises Up Projection for Bulgaria's Economic Growth to1 Per Cent in 2015

EBRD Revises Up Projection for Bulgaria's Economic Growth to 1 Per Cent in 2015

Tbilisi, May 14 (BTA) - The European Bank for Reconstruction and
Development (EBRD) revised its projections for the growth of
the Bulgarian economy in 2015 to 1 per cent, slightly higher
than the previous forecast of 0.8 per cent, EBRD said in a
report published on Thursday during the annual Meeting of the
Bank's Board of Governors.

Despite difficulties in the banking sector in June 2014,
Bulgaria's economy grew at 1.7 per cent year-on-year in 2014,
driven by domestic demand. Consumption was supported by rising
wages and declining inflation, while the fiscal deficit came
larger than planned at 3.7 per cent of the GDP, as a result of
banking bailouts and costs of summer floods.

In 2015 and 2016, contribution of domestic demand to growth will
moderate, partly due to base effect and partly to somewhat
higher country risk premium weighing on credit growth and
consumption. At the same time, the fiscal policy is expected to
tighten, while the contribution of next exports will increase on
the back of better growth prospects in the eurozone -
Bulgaria's main trading partner, following the recent weakening
of the euro to which the local currency is tied through a
currency arrangement, the report says.

Overall, the EBRD expects growth to moderate to 1.0 per cent in
2015 and remain subdued at 1.5 per cent in 2016, unless
structural reforms revive and business environment improve.