site.btaIMF Raises Expectations for Bulgarian Economic Growth in 2023, Lowers Them for 2024

The International Monetary Fund (IMF) is raising its growth forecast for the Bulgarian economy for the current year compared to its expectations from April, according to the autumn report World Economic Outlook: Navigating Global Divergences published on Tuesday. The Fund expects Bulgaria to see a smaller GDP increase in 2024 than projected in the spring report.

In 2023, Bulgaria will achieve GDP growth of 1.7% compared to the previous year, when the economy grew by 3.4%. This is an increase of 0.3 percentage points from the April estimates for the current year.

The Fund expects the country's GDP in 2024 to grow by 3.2% compared to the 3.5% projected in the spring.

The IMF forecasts growth for most countries in the region. In Greece in 2024 GDP is expected to grow by 2%, in Croatia by 2.6%, in Romania by 3.8%, in Serbia by 3%, in Turkiye by 3%, and in North Macedonia by 3.2%. This means that only Romania's economy in the region will grow faster than Bulgaria's, while North Macedonia's economy will grow at the same rate.

The IMF's forecasts for Bulgaria's average annual inflation are worse for both years under review. For 2023, retail price inflation is already expected to be 8.5% (compared to the 7.5% published in the April estimates), following a 13% jump in the EU harmonized methodology last year. For 2024, the Fund expects prices to rise by 3%, instead of the 2.2% rate forecast earlier in 2023.

The IMF forecasts that unemployment in Bulgaria will stand at 4.6% in 2023 and will drop to 4.4% in 2024.

Earlier October, another international financial institution, the World Bank, said it expects 1.4% GDP growth in Bulgaria in 2023 and 2.7% in 2024, both forecast 0.1 pp lower than the bank's previous estimate.

The Bulgarian Ministry of Finance estimated in its updated June medium-term budget forecast that GDP in the country would grow by 1.8% this year and by 3.3% in 2024.