The European Commission (EC) has improved its forecasts for the development of the Bulgarian economy for this year compared to its last report in the spring. However, the institution has lowered its expectations for the next year, predicting a slowdown in the country's gross domestic product (GDP) growth.
For this year, the Commission forecasts that the Bulgarian economy will grow by 2.0%. This is 0.5 percentage points higher than the spring forecasts. For the next year, Brussels predicts a GDP slowdown to 1.8% amid strong private consumption and a contraction in imports, whereas the previous forecast was 0.6 percentage points higher.
Exports are expected to recover by the end of 2023, growing by 4.0% in 2024 and 2.6% in 2025, reflecting the recovery of export markets. The base effect of strong exports in 2022, especially in electricity, negatively affects growth rates in 2023 and is expected to disappear later.
Regarding inflation, forecasts are improving compared to spring ones as well. The EC predicts that the growth of consumer prices in Bulgaria will average 8.8% for the entire 2023 and will slow down to 4.0% next year. For comparison, the levels set in the spring forecasts were 9.4% for this year and 4.2% for 2024.