Bulgaria

map Bulgaria
Bulgaria faced a new political crisis after the government lost a no confidence vote in parliament on 22 June. The motion followed the decision by one of the parties in the heterogeneous four-party coalition to pull out of the government due to disagreements over its policy course. On the economic front performance was better than previously expected, with GDP growing by 5% year on year in Q1, thanks to robust exports and private consumption in that period. However, high inflation remained a big headache for the authorities; apart from the effect of global factors, it accelerated as a result of loose budgetary and income policies. The June 2022 EC Convergence Report concluded that Bulgaria did not fulfil the conditions for the adoption of the euro, citing two problematic conditions: (i) failure to fulfil the criterion on price stability, and (ii) legislation which was not fully compatible with the euro zone requirements. Given such a conclusion, Bulgaria’s target date to adopt the euro on 1 January 2024 now seems problematic. In Q2 economic activity slowed down considerably. However, thanks to the strong performance in the first months of the year, we now expect GDP to grow by 2.5% in 2022 as a whole, which is 0.5 percentage points higher than envisaged in our Spring Forecast. At the time of writing it was not clear how the political crisis would be resolved, and the uncertainties about the future policy course were rising.
        FORECAST*
Main Economic Indicators201920202021202220232024
Population, 1000 persons697669346878...
GDP, real change in %4.0-4.44.22.53.73.5
GDP per capita (EUR at PPP)166701641017850...
Gross industrial production, real change in %0.6-5.98.9...
Unemployment rate - LFS, in %, average4.25.15.34.84.54.0
Average gross monthly wages, EUR648711793...
Consumer prices, % p.a.2.51.22.814.08.05.0
Fiscal balance in % of GDP2.1-4.0-4.1-5.0-4.0-3.0
Public debt in % of GDP20.024.725.1...
Current account in % of GDP1.90.0-0.5-1.8-1.5-1.0
FDI inflow, EUR m198331581769...
Gross external debt in % of GDP61.364.961.8...


Basic data are continuously updated.

* Forecasts are changed beginning of January, April, July and November.
See Press Conferences.

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Monthly Report No. 7-8/2022

Vasily Astrov, Alexandra Bykova, Rumen Dobrinsky, Selena Duraković, Richard Grieveson, Doris Hanzl-Weiss, Gabor Hunya, Branimir Jovanović, Niko Korpar, Sebastian Leitner, Isilda Mara, Bernhard Moshammer, Olga Pindyuk, Sandor Richter, Bernd Christoph Ströhm, Maryna Tverdostup, Nina Vujanović, Zuzana Zavarská and Adam Żurawski
wiiw Monthly Report No. 7-8, July-August 2022
58 pages including 4 Tables and 21 Figures

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BULGARIA: A weak government struggles with mounting challenges

Rumen Dobrinsky
in: Overshadowed by War and Sanctions
wiiw Forecast Report No. Spring 2022, April 2022 , pp. 49-52
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