site.btaOECD Cuts Its Bulgaria Growth Forecast for 2023, 2024

Bulgaria’s economy is expected to grow by 1.7% in 2023, according to the Organisation for Economic Co-operation and Development’s (OECD) November Economic Outlook released on Wednesday.

OECD's new estimate is down by 0.2% compared to June, when the organization projected growth of 1.9% for 2023.

For 2024, the OECD revised down its GDP growth forecast for Bulgaria to 2.8% instead of 3.2%.

The international organization made its first estimate for 2025, projecting a GDP growth of 3% compared to 2024.

Low interest rates fueled a households credit boom, boosting private consumption, but this trend is abating, the OECD analysis said.

The incoming EU funds are expected to contribute positively to investment in 2024 and beyond, the international organization added. Inflation was high in 2023 but is expected to go down in 2024.

According to the OECD, large minimum wage increases in 2024 will create risks of more persistent inflation. Inflation could also be affected by changes in energy prices on international markets.

Inflation is projected to be 9.5% in 2023, 4.5% in 2024, and 3.1% in 2025.

By comparison, the IMF expects the Bulgarian economy to grow by 3.2% in 2024, while its April forecast predicted a 3.5% increase.

On November 15, the European Commission announced that it expected GDP in Bulgaria to increase by 2% in 2023 and by 1.8% in 2024.

In October, the Fitch Ratings credit rating agency also raised its Bulgaria growth forecast for 2023 by 0.6 percentage points to 1.9%. For 2024, however, the agency lowered its expectations for this country’s GDP growth by 0.2 percentage points to 2.8%.

The Bulgarian Finance Ministry has projected economic growth of 1.8% in 2023 and 3.2% in 2024. The Bulgarian National Bank's current forecast is for GDP growth of 1.9% in 2025.