EBRD lowers GDP growth forecast for Bulgaria to 1.5% for 2014; 2% growth expected for 2015 The political uncertainty that has been holding back economic progress in Bulgaria in the past few years coupled with the recent turmoil in the banking sector led to a downgrade in the EBRD’s GDP growth forecast for this year to 1.5% from the 1.9% projected in May. While the Central bank took quite prompt action to make sure the case with Corporate Commercial Bank does not spill over, the situation raised questions about the quality of supervision and the authorities need to look again at how to improve it and ensure this does not reoccur, according to EBRD. An EBRD economist described some of the policy changes in Bulgaria’s energy sector in the last couple of years as disappointing and warned that cutting electricity prices – already the lowest in Europe - is not a solution, but quite the opposite. Even taking income levels into account, energy prices in Bulgaria are below the cost-recovery threshold and this situation is not conducive to attracting investors and the energy sector needs investments, especially on the transmission and distribution side and in energy efficiency. The EBRD sees some pick-up in activity next year when the Bulgarian economy is expected to post a growth of 2.0%. Bulgaria’s economy has proven very resilient and stable. The macroeconomic situation is sound, fiscal deficit and government debt levels are enviable compared to most other EU countries, inflation is negative. So there is scope for growth in the economy. EBRD forecast for 2015 also reflects a slight uptick in the eurozone which is still a major trading partner. SeeNews; FFBH
Posted on: Thu, 18 Sep 2014 18:51:36 +0000
Trending Topics
Recently Viewed Topics
© 2015