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SOFIA – Harmonized inflation in Bulgaria in 2023 is 8.6 percent, with in March 2024 it drops to 3.1 percent on an annual basis. This is stated in the European Commission’s (EC) spring economic forecast.
The inflation rate not exceeding 3% is the last condition that Bulgaria must meet for adoption into the eurozone, and this is expected by the end of the year. For this purpose, Sofia plans to request an additional report from the EC in the autumn, as it is less likely to meet the condition by the regular report in July.
The gross domestic product of Bulgaria this year will increase by 1.9 percent, and in 2025 – by 2.9 percent, adds the EC. The main driver of growth will be domestic demand, although private consumption will move within moderate limits.
Exports are expected to increase significantly after the first quarter of the year, along with the increase in external demand, imports will also increase, encouraged by domestic demand. The budget deficit of the country is expected to amount to 2.8 percent in 2024 and 2.9 percent in 2025. under the pressure of increased pensions and wages.
The total government debt in 2025 will increase to 24.6 percent of GDP, the commission predicts. The document states that household savings have increased more than consumer lending, which shows a tendency towards savings. Investments have increased, mainly due to purchases of new equipment, while imports have declined.
In 2024, the trend reverses and GDP begins to increase. Forecasts are for consumption to grow by the end of the year and in 2025, supported by the good condition of the labor market. EC predicts a continuation of the investment growth, supported by an increase in production capabilities. (15.05.2024)