site.btaUPDATED IMF Adjusts Downward Bulgarian Economic Growth, Expects Lower Inflation

The Bulgarian economy will grow by 2.3% in 2024, according to the latest World Economic Outlook prepared by the International Monetary Fund (IMF). It was presented Tuesday at the institution's headquarters in Washington within the framework of the annual meetings of the IMF and the World Bank.

This represents a downgrade from the IMF April forecast which said Bulgaria's GDP would grow by 2.7% this year.

The IMF notes that Bulgaria's economy grew by 1.8% in 2023 (revised upwards to 1.9% late last week by the National Statistical Institute).

For 2025, IMF now expects a 2.5% growth, down from the 2.9% forecast in April.

Against this backdrop, the credit rating agency Fitch Ratings said last week it expects Bulgaria's GDP to grow by 2% this year and by 2.5% in 2025.

The Bulgarian National Bank's expectations in its July macroeconomic forecast were for growth of 2.1% in 2024 and 3.2% in 2025.

The IMF report released Tuesday forecasts that inflation in Bulgaria will be 2.8% in 2024, after 8.6% last year. The current estimate is down from the 3.4% rate expected in April. For 2025, the IMF estimates that consumer prices in Bulgaria will increase by 2.6%, down from the 2.7% forecast in the spring of this year.

Bulgaria's foreign trade balance will be in negative territory in 2024, the IMF predicts. The deficit is expected to be 1% of the country's GDP. In 2025, the current account deficit will grow to 1.7% of GDP. Back in the spring of 2024, the IMF forecast was for a current account deficit of 0.3% this year and 1.2% in 2025.

Concerning unemployment, the IMF estimates remain unchanged from the spring forecast. The jobless rate is expected to fall from 4.4% in 2023 to 4.3% in 2024 and 4.2% in 2025.

Looking at Europe's emerging markets and developing economies (15 countries of Eastern Europe, including Bulgaria), the IMF forecasts the region's economy to grow by 3.2% in 2024 (compared with a spring 2024 forecast of 3.1%) and 2.2% in 2025 (compared with a spring 2024 forecast of 2.8%). In 2023, the region's GDP increased by 3.3%.