Bulgaria’s minfin slashes 2024 GDP growth f’cast to 2.2%
Sofia: Bulgaria’s finance ministry said on Tuesday that it expects the country’s real economy to expand by 2.2% in 2024, lowering its spring projection by 1 percentage point (pp).
Bulgaria’s gross domestic product (GDP) is forecast to rise by 2.8% in 2025 and by 3% in 2026, fueled by higher public investment and exports, the ministry said in its 2024 Autumn Macroeconomic Forecast. However, growth is projected to decelerate to 2% annually in 2027 and 2028.
Inflation under the EU Harmonised Index of Consumer Prices (HICP) is expected to slow to an annual average of 2.6% this year and further down to 2.4% in 2025. Service price increases, driven by rising labour costs, will be a key inflation contributor.
HICP inflation is forecast to abate further, reaching 2.3% in 2026 and tapering to 2.2% in 2027 and 2% in 2028.
The finance ministry expects employment growth at 0.6% in 2024, slowing slightly to 0.5% in 2025, with the services pacing job growth. The unemployment rate is expected to decline by 0.1 pp annually in 2024 and 2025, to 4.2% and 4.1%, respectively, before holding steady at 4% in 2026-2028.
Compensation per employee is seen to grow by 14.3% in 2024 and 9.1% in 2025 on the back of an increase in the minimum wage since the beginning of the year and higher public sector wages.
“The country’s sustainable external position is expected to be maintained during the forecast period. The current account deficit will increase from 0.8% of GDP in 2024 to 3.7% of GDP in 2028 with the outpacing growth of imports over exports of goods,” the ministry said.
The ministry said it has also prepared an alternative macroeconomic scenario, considering potential risks like a less favourable development of the external environment and higher international prices of raw materials. Under that scenario, inflation in the country will be higher compared to the baseline by 1 pp and 0.5 pp in 2025 and 2026, respectively, while real GDP growth will be 0.4 pp lower in the same period.
