January 19 (SeeNews) - UniCredit said it raised its projection for Bulgaria's economic growth in 2017 to 3.6%, 0.6 percentage point higher than the previous forecast made in September.
"Growth is likely to remain strong in early 2017, and if the general elections don’t produce a pronounced shift toward more dysfunctional policies, the economy is likely to reach its cyclical peak in end of 2017 or in early 2018 – roughly two years after the rest of CEE - EU," UniCredit said in its January 2017 CEE Quarterly Report.
Risks have risen "as odds for a populist-nationalist coalition winning the general elections have increased", UniCredit added.
Bulgaria's 2016 GDP growth is estimated at 3.4%, up 0.3 percentage point compared to the September forecast. The economic growth in 2018 is also projected at 3.4%, UniCredit said.
"In 2017, we expect Bulgaria to be upgraded by S&P to investment grade after the downgrade below investment grade in December 2014," Unicredit pointed out.
Bulgaria's foreign debt is expected to fall to 67.9% of GDP in 2017 and to further drop to 63.7% of GDP in 2018. In its September report UniCredit forecast that foreign debt will reach 74.3% of GDP in 2017 and 70.7% in 2018.
Bulgaria is expected to hold early parliamentary elections in the spring following the resignation of the minority coalition government of GERB and their junior partner, right-wing Reformist Bloc, in November 2016.