January 10 (SeeNews) - Bulgaria's economy is projected to expand by 2.4% real in 2024, the World Bank said, revising downwards its June forecast by 0.4 percentage points.
In 2025, however, Bulgaria's gross domestic product (GDP) growth will accelerate to 3.3%, the global lender said on Tuesday in the first Global Economic Prospects edition for this year, increasing its June economic growth estimate for next year by 0.3 pp.
The World Bank estimates that Bulgaria has ended 2023 with GDP growth of 1.7%, or 0.2 pp more than the lender projected in June.
Political instability has affected the speed of disbursements of EU funds, seen as a crucial element for investment pick-up, to Bulgaria, the World Bank said. Nevertheless, substantial GDP gains stand to be made both in Bulgaria and Romania from the implementation of sweeping sets of reforms in market competition and regulation, taxation, skills, labour market, and research and development.
In terms of taxation, as of January 1, a minimum rate of effective taxation of 15% for multinational companies active in the EU was introduced in all EU member states. The tax applies to large companies with an EU-based parent or subsidiary and which generate combined annual revenue of more than 750 million euro ($821.4 million). Corporations were taxed at 10% in Bulgaria until the end of last year.
Bulgaria's finance ministry has said it expects a 3.2% real economic growth this year, while the EU Commission has lowered its forecast for the country by 0.6 pp to 1.8%.
($ = 0.9131 euro)