February 16 (SeeNews) - The European Bank for Reconstruction and Development (EBRD) on Thursday predicted that Bulgaria's real economy will grow by 1.0% in 2023, down from 1.5% forecast in September, with the slowdown reflecting decreased estimates for over half of 36 monitored countries.
Bulgaria's gross domestic product (GDP) is then seen rising 2.6% in 2024, EBRD said in an update to its Regional Economic Prospects report.
The European lender did not amend its 3.0% September estimate for Bulgaria's economic growth in 2022, a significant drop from the 7.6% rate of growth recorded in 2021.
The latest forecast for Bulgaria's economic expansion in 2023 is 0.5 pp below the overall expected growth for the EBRD's Southeastern EU region, which also includes Greece and Romania. Even as they remained resilient to shocks, the three countries registered a sharp drop in economic growth in the second half of 2022, according to the lender.
The region's economic growth is forecast to continue slowing down this year, to 1.5% compared to 2.0% suggested in September, due to high energy and consumer prices. Regional economic growth will pick up in 2024, to 3.1%, but Bulgaria's GDP is again seen not matching that increase and remaining 0.5 pp lower.
“The EBRD’s economies are still suffering from a mix of high gas prices and inflation, with the latter likely to take longer to fall than markets expect," EBRD’s chief economist Beata Javorcik said. She added that the lender finds "misplaced" any optimistic assessments of the rate of recovery and growth in light of recent market disruptions, in particular the ongoing war in Ukraine.
Flash estimates from Bulgaria's statistical office this week pointed to a quarterly economic growth slowdown, with GDP rising 2.1% on the year in the last three months of 2022 against a 3.1% annual rise in the third quarter.