March 13 (SeeNews) - United Bulgarian Bank (UBB) said on Monday that it is raising to 1.5% from 0.7% its projection for Bulgaria's real economic growth in 2023, on the back of macroeconomic developments in the country in the final quarter of 2022 and the first three months of this year.
The improved forecast was due to the 6.3% annual growth in consumption, in particular household consumption, in the final three months of last year, UBB said in a quarterly macroeconomic report. The effect of increased consumption was strengthened by a rise in gross fixed capital formation, which increased for the first time since the fourth quarter of 2020, by 2.4% year-on-year.
The reduced likelihood of a continued political crisis in Bulgaria, along with decreasing energy prices, also contributed to the better outlook.
Bulgaria's gross domestic product (GDP) grew by a real 3.4% in 2022, the statistical office announced last week. This compared with UBB's previously forecast GDP rise of 3.5%.
The lender also predicts that interest rates in Bulgaria are likely to increase but later than previously expected, which will stimulate the economy but also inflation. Bulgaria was one of the few exceptions among EU member states, with average wages rising at a similar pace as consumer prices in 2022, by 13.6% and 13.5%, respectively. Average wages will keep rising in Bulgaria, but at a slower pace in the current year, UBB added.