Bank Austria forecasts a 2.9% GDP growth in CEE for 2013

Bank Austria expects the gross domestic product (GDP) in Central and Eastern Europe (CEE) to grow by 2.9% in 2013, read an analysis of Bank Austria on the main economic indicators of the region for the current year. The projected increase is lower than the previous forecast of a 3.1% economic growth. On the other hand, the new forecast is higher than the 2.5% GDP growth in the region for 2012. The economic growth is, to a large extent, expected to be the result of higher external demand, low interest rates and a lower inflation rate, read the bank’s quarterly analysis.

According to the report of Bank Austria, the main advantage of the CEE region remains the flexibility and low cost of labour. On the other hand, however, economic growth in the region depends more on demand than on supply. Therefore, even in a stable economic environment, growth cannot be guaranteed, according to Bank Austrian.

Bulgaria’s State budget projects a 1.9% GDP growth this year, although the estimates of the revenues, according to Finance Minister Simeon Djankov, have been made for an increase of approximately 1.2%. Last November, the European Commission (EC) forecast GDP growth for the country of only 1.4% for 2013, down from its previous forecast for 1.9% of GDP. A longer-term forecast of the European Commission for Bulgaria’s economic growth predicts it at around 2% for 2014. Domestic consumption will have the largest contribution to the economic growth in 2012 and 2013, according to the EC. The economic growth for 2012, according to economists, will be around 1%.

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