The International Monetary Fund (IMF) raised its assessment of economic growth of Bulgaria to 3% in 2016, from the previous forecast from April to 2.3%. However, the estimations for next year is slightly slower to 2.8%. The assessment of the institution is much higher than that forecast by the entire European Union, which set forecasts for economic growth of Bulgarian at 1.9% in 2016 and 1.7% in 2017, and the Eurozone estimated 1.7% in 2016 and 1.5% in 2017.
However, the International Monetary Fund expects Bulgarian export to grow by 4.2% this year, but slowing to 3.4% in 2017, against the previous assessment for 4.1% in 2016 and 4.2% in 2017. The imports are expected to growth more significantly to 3.8% in 2016 and 3.3% in 2017, against the previous forecasts for 2.5% each year.
IMF makes extremely serious adjustment to its forecast for inflation in Bulgaria, as in the previous report was expected weak inflation of 0.2% for this year, but according to the new forecast shows that the country will account for deflation, at a level of 1.6%. The good news is that next year Bulgaria is expected to return to growth in consumer prices of 0.6%.
The public debt of the Balkan country will continue to grow, albeit more slowly than the previous forecast – to 29.7% of GDP this year, compared to 30.2% in the previous report. However, the IMF expects it to decline in 2017 to 26.3% of GDP, as the previous expectations were for an increase to 30.6%.
The expected economic growth for this year and next year is well above average for the region of Central, Eastern and Southeastern Europe, respectively of 1.3% and 2.1%. The strongest GDP growth is expected to reach Montenegro (5.1%) and Romania (5.0%) and weakest – Belarus (-3.0%), Russia (-0.8%), as well as Ukraine and Estonia (1.5%).
According to the report, the dynamic growth in the region remains stable. Outside the Commonwealth of Independent States (CIS), growth continues at a good pace supported resilient policies and led by growing consumption. Although, the low inflation and cyclical recovery seems to be close to completion in this part of the region with a declining unemployment rate to pre-crisis levels, greatly increasing salaries and increasing credit recovery.
The pace of contraction is moderate in Russia after fuel prices rose from their lowest levels, while the rest of the CIS gradually emerging from recession due to increased external demand.
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