December 28 (SeeNews) - The Bulgarian branch of France-based credit insurance company Euler Hermes said it expects Bulgaria's economy to expand by 3.5% in 2018, slowing down from 3.7% growth projected for 2017.
"We do not expect the ongoing rise in fuel prices to have a negative impact on some sectors or on the Bulgarian economy as a whole. Our forecast for 2018 remains stable with opportunities for development," Kamelia Popova, CEO of Euler Hermes for Bulgaria, said in a statement on Wednesday.
However, Euler Hermes has left unchanged Bulgaria's rating of B2 indicating a moderate risk.
"The main reason for this is the external debt, which is still high," Euler Hermes said.
Bulgaria's foreign debt-to-GDP ratio is seen at 65% in 2017 and 63% in 2018.
"This ratio, however, continues to be significantly higher than what is considered normal for developing economies - 50%, and is a macroeconomic indicator that can not be ignored," Manfred Stamer, chief analyst at Euler Hermes said, adding that this debt level could create serious complications in times of economic turmoil at the global or regional level.
In 2018, public and individual consumption in Bulgaria are expected to grow by 2.4% and 4.8%, respectively. Estimated figures for 2017 point to growth of 3.5% of public consumption and a 5% increase of individual consumption.
Average annual inflation in 2018 is seen at 2.5%, up from 2.1% in 2017.
Unemployment is seen falling to 5.2% next year, from 6.2% in 2017.