Bulgarian economic growth forecast down to just 1.4% of GDP in the National Reform Programme 2012-2020

Bulgaria's economic growth would reach a modest figure of 1.4% of GDP in 2011, instead of 2.9% as was set in the budget. This showed a draft of the National Reform Programme, for 2012-2020, which was published by the Ministry of Finance yesterday.
Experts specify that the slowdown would be mainly due to the lower contribution of net exports to the economy. Regarding consumption, the forecast is that households would remain cautious, but would contribute positively to the GDP growth. The updated draft of the Reform Programme states that economic growth would be between 2.5% - 4% in the period 2013-2015. Investments are expected to increase because of the absorption of European funds. They would reach € 1.14 bn in 2012, and €2.5 bn - within three years. According to the budget report for 2012, the stable macroeconomic environment and tight fiscal discipline should lead to a more dynamic investment activity.

The Reform Programme takes into consideration that amendments to the Investment Promotion Act are due to be passed in 2012, aimed at stimulating investments in the high technology services. This would support the exports of services, which would exert a positive impact on the current account, experts explain.

The National Reform Programme also notes that the labour market in 2012 would remain at the same level as in the previous year. According to estimates, in the first half of 2012, the unemployment rate would even be anchored to a higher level, on an annual basis, but after the summer it would be down to the level of the second half of 2011 - 11.3%. A significant improvement in the labour market is expected in 2013. By the end of 2015, the average annual growth in employment would be about 1% and the unemployment rate would gradually decrease to 9.8%.

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