April 11 (SeeNews) - Bulgaria's real gross domestic product (GDP) growth is projected to slow down to 2.6% real this year from an estimated 4.2% in 2021 as the ongoing war in Ukraine has led to a revision of growth forecasts globally, the World Bank said, slashing 1.2 percentage points off its January projection for the country's economic expansion in 2022.
Further downwards revisions are likely in case the military conflict extends over time or in the event of new COVID-19 waves amidst the population's low vaccination rates, the World Bank said in the spring edition of its Europe and Central Asia (ECA) Economic Update published on Sunday.
The growth of economic output in real terms is projected to accelerate to 4.3% in 2023, the World Bank said.
In the context of energy and food prices being additionally driven up by the military conflict and supply chain disruptions, inflation in Bulgaria is expected to accelerate to 9.3% in 2022, before abating to 3.4% the year after. The situation is likely to further erode purchasing power, potentially augment poverty and bring about a higher fiscal cost, if current state measures in support of businesses and individuals are extended beyond the first quarter, according to the World Bank's forecast.
"Over the medium run, growth is expected to be fuelled by EU-funded public investment and improved private investor sentiment on the near-term prospect of eurozone entry," the World Bank said.
Overall economic output in ECA is forecast to shrink 4.1% in 2022, or more than 7 percentage points below previous forecasts.
GDP in the World Bank's Central Europe region, which includes Bulgaria, Croatia, Hungary, Poland and Romania, is forecast at 3.5% in 2022, a drop of 1.2 percentage points from the January estimate.
The World Bank's latest forecast for Bulgaria's GDP growth in 2022 is more optimistic than the prediction of the country's central bank which on Friday revised its projection to 2.1% from 3.6% anticipated earlier.