Bulgaria: Prognosis for Bulgarian GDP growth
According to the prognosis of the World Bank, Bulgarian GDP will grow in 2014 by about 1.7%. The analysis goes even further as the forecast for the coming year suggests an estimated increase of 2.4% in 2015; and up to 2.8% growth in 2016. As a comparison, at the beginning of the year the expectations were that the Bulgarian GDP will increase by 2%. The report is in alignment with the opinion of the European Commission and is slightly higher than the forecast of the International Monetary Fund. In the report, Bulgaria is listed in the sub-region of the developing countries from Central and East Europe, along with Albania, Romania and Serbia. The expectations are that the economies of these countries will increase mainly by realising higher export levels mainly to Western Europe, even though this index recorded a drop during the past 12 months. Exporting is the main index that could increase the GDP of the developing countries, due to several reasons such as the politically unstable situation in the region; the high rate of unemployment and the fragile bank systems. Another destabilising factor is the tension between the EU and Russia. Additionally, there is the risk that the growth of the Bulgarian economy will be prevented by both the ageing of the population and the emigration of the younger population. Also, according to the World Bank there are no significant reforms that could increase investments into Bulgaria.
The advice of the Bank to the Bulgarian experts is to invest more funds faster into the internal structuring reforms, so as to be able to stimulate growth up to a level that will eradicate poverty in the country.
Meanwhile, global GDP has decreased from 3.2% to 2.8% with the main factor being the situation in Ukraine. The tendency is for the growth of the economies of the developing countries to increase faster than those of the 'rich countries'.
Generally, the opinion of the institution is that financial stability is improved and financial indices are extremely good. Nevertheless, the warning of the World Bank is that now is the time for experts and leaders to prepare their economies for the next financial crisis.
Donka Pechilkova (firstname.lastname@example.org)
Eurofast Global, Sofia Office
Tel: +359 2 988 69 78