Finance Ministry Projects 0.8% Real GDP Growth in 2015

Finance Ministry Projects 0.8% Real GDP Growth in 2015

125 ECONOMY - FINANCE MINISTRY - MACROECONOMIC FORECAST

Finance Ministry
Projects 0.8% Real GDP Growth
in 2015


Sofia, November 27 (BTA) - The Finance Ministry has updated its
autumn macroeconomic forecast, its press office said on
Thursday.

Real GDP growth is projected at 0.8 per cent in 2015, 1.5 per
cent in 2016, and 2.3 per cent in 2017. Consumption will rise by
0.5 per cent of GDP in 2015. Export of goods and services will
increase by 2.9 per cent, and import by 2.3 per cent, according
to the updated forecast.

The unemployment rate is projected at 11.7 per cent. Annual
average inflation is 0.1 per cent. The current account will
stand at 1.8 per cent of GDP. The trade balance will be in a
deficit of 7.3 per cent of GDP.

The update was necessitated by internal and external changes in
the economic environment, the Finance Ministry said. The
European Commission's November autumn forecast for the
development of the EU economy is more pessimistic than the
spring forecast. The Commission experts expect a slowdown in
economic growth in the Euro zone at the end of 2014 and the
beginning of 2015, and a gradual improvement in economic
activity afterwards.

The considerable drop in the international prices of crude oil
in the last few months has led to a revision of the assumptions
about its price, and hence of the forecast for the consumer
prices of fuels and for inflation processes in Bulgaria.

The negative change in the expectations for the dynamics of the
global and EU economies, along with the continuing drop in
international prices, have influenced the forecast for
Bulgaria's foreign trade. The Finance Ministry scaled down the
projected real growth of the export of goods and services,
meaning that export will contribute less to GDP growth in 2015.

The entrepreneurs' worsened expectations for investment activity
in industry, and of consumers for the development of the
economic situation in the country, have prompted a lower
projection for the rise in domestic demand. The expectations for
a slowdown in investment activity and consumption in the
country, along with lower demand for resources by
export-oriented sectors, are reflected in a lower import growth
projection for next year.

The updated macroeconomic forecast is also based on an
assessment of the impact that non-payment of part of the
non-guaranteed deposits in Corporate Commercial Bank will have
on economic growth. The document was used in drafting the
medium-term budget forecast for 2015-2017. LI/DD

Source: Sofia