site.btaEC Upgrades Its Economic Growth Forecast for Bulgaria to 3.1% in 2016 and 2.9% in 2017

EC Upgrades Its Economic Growth Forecast for Bulgaria to 3.1% in 2016 and 2.9% in 2017

Brussels, November 9 (BTA) - The European Commission has revised its economic growth forecast for Bulgaria to 3.1 per cent in 2016 and 2.9 per cent in 2017. The autumn forecasts were unveiled Wednesday.

In its spring forecast, the Commission expected the Bulgarian economy to grow by 2 per cent and 2.4 per cent, respectively.

Private consumption is expected to be the key growth driver. Inflation is forecast to remain negative in 2016 and move into positive territory in 2017. Unemployment is expected to continue decreasing in the coming years. The fiscal deficit for 2016 is projected at 0.9 per cent of GDP and is forecast to marginally increase in 2017.

While private consumption growth is forecast to remain robust at 3.2 per cent in 2016, investment is expected to contract by 0.8 per cent due to the slowdown in EU funds absorption following the completion of the 2007-2013 programming period.

Investment is forecast to pick up momentum with growth of 3.2 per cent in 2017, as more projects co-financed by the EU under the 2014-2020 programme are likely to be implemented in 2017.

Overall, risks to the growth outlook appear balanced. A significantly slower absorption of EU funds could dent investment and growth in 2017. Given the openness of the economy, weak import demand from the main trading partners, especially in Europe, and surging oil prices would pose external downside risks, the analysis says.