site.btaEuropean Commission Revises Up Economic Growth Forecast for Bulgaria in 2021, Down for 2022

Brussels, July 7 (BTA correspondent Nikolay Jeliazkov) - The
European Commission released Wednesday its Summer 2021 interim
Economic Forecast about the European economy, according to which
 Bulgaria's real GDP growth is expected to reach 4.6 per cent in
 2021 and 4.1 per cent in 2022. Compared to the Spring Forecast,
 the annual real GDP growth in Bulgaria rate is 1.1 pp. higher
in 2021 and 0.6 pps. lower in 2022. The upward revision in 2021
reflects mainly the strong recovery in the first quarter of this
 year, while strong base effects explain the downward revision
in 2022. The risks to the forecast are broadly balanced. On the
upside, consumer demand may prove stronger than projected. On
the downside, given the relatively slow rate of COVID-19
vaccination in the country, subsequent lockdown periods may be
needed.
 
Inflation is set to accelerate to 1.9 per cent in 2021 on the
back of higher assumed energy prices and some second-round
effects from increased fuel prices. Non-energy industrial goods
and processed food are also forecast to sustain stronger price
dynamics. In 2022, Harmonized Index of Consumer Prices (HICP)
inflation is expected to reach 2.5 per cent, supported by
aggregate demand.

Despite continued pandemic-related restrictions to economic
activity, real GDP grew by 2.5 per cent quarter-on-quarter in
the first quarter of 2021, driven by exports and private
consumption.
Consumer confidence reached pre-crisis levels in April and May,
suggesting further improvements in domestic consumer demand this
 year. In 2022, household consumption is projected to continue
to expand, in line with the improving situation of the labour
market. Exports of goods and services are forecast to follow the
 favourable developments in external demand and the lifting of
containment measures. The start of the implementation of the
Recovery and Resilience Plan is set to support aggregate
investment in 2022. NV/ZH