January 26 (SeeNews) - The Bulgarian branch of France-based credit insurance company Euler Hermes said on Thursday it expects Bulgaria's economy to expand by 2.8% in 2017, slowing from 3.3% growth in 2016.
"Our forecast for the performance of the Bulgarian economy in 2017 is one of preserved stability along with some opportunities for positive development. However, Euler Hermes will keep Bulgaria's rating at B2, which indicates moderate risk. The main reasons are the high level of foreign debt and the consequences of the banking crisis of 2014", Kamelya Popova, director of Euler Hermes Bulgaria, said in a statement.
Projects with co-financing from the EU are expected to grow by 1.5% in 2017, while public spending will rise by 1%.
Individual consumption is projected to increase by 2%, due to expected decrease in unemployment - from 8.6%% in 2016, to 7.5% forecast for 2017.
"However, Bulgarians remain highly cautious and conservative, with bank deposits continuing to increase despite the fall in interest rates, i.e. at the moment, they are more inclined to save than to invest," Popova added.
Exports will continue to have positive impact on the economy, according to the statement. Bulgaria's exports grew by 5.5% last year and are expected to increase by 5.0% in 2017.
A decrease in the number of bankruptcies in the country in 2016 is also an indication of economic stability, Euler Hermes pointed out, adding that it expects about 650 insolvency procedures to be opened in 2017.
Pharmaceutical, chemical, food and IT industries remain the most stable sectors of the Bulgarian economy, Euler Hermes said.
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