May 16 (SeeNews) - The European Bank for Reconstruction and Development (EBRD) on Tuesday raised by 0.3 percentage points to 1.3% its projection for Bulgaria's real economic growth in 2023 posted in February.
The EBRD lifted by the same percentage points its projection for Bulgaria's gross domestic product (GDP) in 2024, which is now seen to rise 2.9% next year, according to the May update of the lender's Regional Economic Prospects report.
Bulgaria's GDP grew by 3.4% in 2022, at a slower pace for the second year in a row, determined by a decline in export volumes and a drop in investments due to a delay in absorbing further tranches of EU funding available through the national Recovery and Resilience Plan (RRP). Bulgaria has so far received 1.37 billion euro ($1.48 billion) out of the 5.69 billion euro of EU grants the country stands to get under the RRP.
The projected GDP rise in 2024 will be the result of a stronger investment pace, with projects under the recovery plan starting to unfurl as the country's enduring political instability is expected to wane. Growth will also be buoyed by Bulgaria's prospect for eurozone accession, albeit delayed by a year to 2025, EBRD added.
In terms of consumer prices, Bulgaria's EU-harmonised index, or HICP, has decelerated to 12.1% in March from a peak of 15.6% reached last September.
"Falling inflation will support the recovery of real wages and the purchasing power of households," EBRD noted.
The three economies of the lender's Southeast Europe (SEE) region, Bulgaria, Greece and Romania, are expected to grow by 2.3% overall in 2023, or 0.8 pp more than predicted in February. This year's growth in SEE is supported by "the prospect of Eurozone accession boosting investor confidence in Bulgaria, higher public investment in Romania and the carry over effect of stronger outturns in Greece in the last quarters of 2022," EBRD said.
However, the development lender revised the region's economies to inch up to 3.0% real in 2024, slightly down from the 3.1% projected in February.
($ = 0.9194 euro)