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OECD cuts Bulgaria's 2021 GDP growth forecast to 3.2%

OECD cuts Bulgaria's 2021 GDP growth forecast to 3.2% Photo: Antonia Dobreva / License: All rights reserved

SOFIA (Bulgaria), December 2 (SeeNews) - The Organisation for Economic Co-operation and Development (OECD) said that it expects Bulgaria's gross domestic product (GDP) to grow by 3.2% in 2021, lowering its May projection for economic expansion of 3.8%.

Bulgaria's economic growth is expected to accelerate to 4.2% in 2022 and to 4.5% in 2023, the OECD said its December 2021 Economic Outlook.

"The renewed dynamism of exports, the strength of investments supported by significant EU funds and the robust momentum of private consumption should stimulate activity," the organisation noted.

The decline in unemployment is expected to continue, with wage increases leading to a gradual rise in underlying inflation to 2.2% in 2023, the highest rate since 2010, while headline inflation will accelerate in late 2021 and early 2022 due to the surge in energy prices, the organisation added.

Speeding up vaccination, which is progressing only slowly, is essential to limit the risk that a further expansion of the pandemic will lead to new containment measures that would hamper the recovery, according to the OECD.

"Effective management and use of the EU funds received by Bulgaria has a key role to play in sustaining activity and boosting potential growth. Strengthening potential growth and the convergence process of the country also requires pursuing and deepening reforms to increase competition, modernise the administration and fight corruption," the OECD also said.