Bulgaria's c-bank lowers 2024 GDP growth f'cast to 2.2%

In 2025, gross domestic product (GDP) growth is estimated to speed up to 3.3%, slightly lower than the 3.4% projected in December, and then decelerate to 2.6% in 2026, the Bulgarian National Bank (BNB) said in its March macroeconomic forecast published on Tuesday. This dynamic will be largely defined by public investment, the lender added.

Last year, the country's GDP increased by a real 1.8%, according to preliminary data from the statistical office.

Domestic demand in 2024 is projected to be supported by increased private consumption amid rising real labour income, investment growth, as well as higher government spending.

Inflation measured by the Harmonised Index of Consumer Prices (HICP) used EU-wide is seen to average 3% in 2024 and abate to 2.3% at the end of the year, compared to 3.1% projected in December, before speeding up to 2.7% in 2025 and 2026. Apart from the steep price increases in 2023, the slowdown in inflation this year will also be driven by expected lower international energy prices and declines in some goods and services.

"Risks to the forecast for real GDP growth are seen as balanced for 2024, while for 2025 and 2026, risks of achieving lower growth than in the baseline scenario prevail, given the ongoing global geopolitical conflicts. In addition, there continue to be significant internal risks of a slower-than-forecast implementation of investment projects financed with both national and EU funds," BNB noted.