UBB lifts Bulgaria's 2023 GDP growth f'cast to 1.9%

Following an estimated annual gross domestic product (GDP) increase of 1.7% in the third quarter due to a downturn in the Eurozone, the lender expects the slower growth trend to continue in the last quarter of 2023, UBB said in its monthly macroeconomic report for December published on Wednesday.

The largest Eurozone trading partner, Germany, fell into a technical recession, which also impacted Bulgaria in the third quarter.

UBB said it sees Bulgaria's GDP growth accelerating to 2.3% in 2024, compared to a projected annual rise of 0.5% in the Eurozone.

"The outlook for the economy in 2024 will continue to depend on trends in the Eurozone, as well as being influenced by specific national factors," UBB chief economist Emil Kalchev said.

The bank affirmed its 2023 inflation forecast of 9% made in November. Consumer prices are then projected to rise by 5% in 2024.

Despite a stable labour market, demand for skilled workers outpaces supply, with harmonised unemployment at the end of September remaining at 4.5%, close to natural unemployment.

On Thursday, Bulgaria's statistical office said the country's GDP rose by 1.8% year-on-year in the third quarter of 2023, according to preliminary data.