Raiffeisenbank: If exports are severely affected, Bulgaria can be pushed back into recession

Recent fluctuations on the global financial markets could slow down the economic development of major Bulgarian trading partners over the coming quarters.

If this happens, a contraction in the volume of Bulgarian exports can be expected, which will exert pressure on the domestic demand and the production activity and will shrink the labour market, drawing the economy back into recession, shows the monthly review of Raiffeisenbank (Bulgaria), released at the end of July.

Experts reported that the recovery of our economy remained fragile and heavily dependent on the development of the international economic conditions. Net exports continue to be the main factor for improvement of the macroeconomic indicators in the country. According to them, the recovery of the domestic demand is lagging behind expectations and the economic development is uneven in the different sectors - the industry production records stable growth rates, mainly due to the increasing export demand, while the construction activity remains depressed.

Since the beginning of the year, the real growth in trade turnover has stabilized at 2-3% on an annual basis. In May, the growth in retail trade accelerated to 1.8% in real terms, on an annual basis, which is an indicator for improvement of the domestic consumption. “However, there are no signs of recovery in the construction sector. In May, both the building production and engineering construction works continued to decline, stated bank experts.

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