site.btaBulgaria's Real GDP to Hit 3% in 2025 - World Economic Situation and Prospects Report

The United Nations Department of Economic and Social Affairs (UN DESA) published on Thursday night the 2024 edition of the World Economic Situation and Prospects report. According to UN DESA, the world economy continues to face multiple crises, jeopardizing progress towards the Sustainable Development Goals, even though global economic growth outperformed expectations last year. For Bulgaria, which is seen as a country with a developed economy and above-average or average incomes, the outlook for this year and the next is positive – a moderate acceleration in the real GDP growth rate is expected: from the projected 1.9% in 2023 to 2.6% in 2024 and 3% next year, against an EU forecasted growth of 0.5%, 1.2% and 1.6% respectively.

The report begins with a foreword by UN Secretary-General Antonio Guterres that reads: "As this report makes clear, 2024 is projected to be another tough year. Sluggish global growth is projected to slow further. Investment will remain weak. The debt crisis will continue to spiral, as debt service obligations reach new heights. And devastating conflicts and escalating extreme weather are bringing uncertainty and risk to the global economy. The result: development delayed and denied."

Against this backdrop of lingering risks and uncertainties, global GDP growth is projected to slow from an estimated 2.7% in 2023 to 2.4% in 2024. Growth is forecast to improve moderately to 2.7% in 2025 but will remain below the pre-pandemic trend growth rate of 3%.

The UN also expects a significant improvement in Bulgaria's consumer price inflation dynamics within the European context. This year, inflation will average 3%, compared to 8.4% in 2023, to drop to 2.8% in 2025.

The outlook on the international competitiveness of the Bulgarian economy, however, is unfavourable, as it saw a momentary culmination in 2023 but continues to deteriorate otherwise.

Bulgaria has managed to preserve the purchasing power of the population thanks to a relatively balanced growth of wages against the rate of increase of consumer prices.