Intellinews - Bulgaria Country Report - March 2012

Additional Information

In 2011, Bulgaria’s GDP rose by 1.7%, below the government forecast of 2.8% and the forecasts of most of the international institutions, but up from 0.2% in 2010 and 1.6% in the flash estimate released in February. According to preliminary data of the statistics office, in seasonally and working-day adjusted terms GDP expanded by 1.6% y/y in Q4 2011. The growth flattened at its previous quarter level but is lower than the 3.2% y/y and 2.2% y/y increases in Q1 and Q2, respectively.

The finance ministry expects economic growth to slow to 1.4% in 2012 and then recover to 2.5% in 2013, 3.5% in 2014 and 4% in 2015, according to the updated national reforms programme published on the website of the ministry. Presently, the EC also expects GDP growth to reach 1.4% this year, while the IMF, the WB and the EBRD appear to be more conservative with expectations for economic growth of 1.3%, 1.2%, and also 1.2%, respectively.

Bulgaria’s industrial production index declined by real 3.1% y/y in January, according to preliminary data of the statistics office. The contraction sustained for a second month in a row steepening from revised 1.2% y/y in December 2011. Following robust 30% expansion last year, Bulgaria’s exports turned to 10.2% y/y decline in January to reflect contracting foreign demand. The general budget deficit narrowed by 24.7% on the year to BGN 565mn (EUR 288.9mn) in Jan-Feb 2012.

The parliament approved the decision of the government to scrap the project for construction of a 2,000 MW nuclear power plant in the Danube town of Belene. Deputy finance minister Boryana Pencheva said in an interview for Capital Daily that in the week April 2-6 the cabinet may empower finance minister Simeon Dyankov to start a procedure for placing a Eurobond on the international markets.