Financial and business news from Bulgaria

The epidemic could shrink Bulgaria's GDP growth to 1.4% in 2020

Gross domestic product (GDP) growth in Bulgaria could shrink to 1.4% in 2020 due to the negative effect of the coronavirus epidemic. This is clear from the downgraded forecast of the Vienna Institute for International Economic Studies (wiiw), published on Tuesday, money.bg reported.
Experts say the economy will still remain in positive territory despite an expected reduction of 1.4 percentage points compared to the previous forecast, which was for growth within 2.8 per cent.

From wiiw expect the most serious pressure of the epidemic to put on the economies of Turkey, Belarus and Russia. The revision for GDP growth of these countries is 1.8, 1.9 and 2.2 percentage points down, respectively. Thus, the growth of our southern neighbour could remain at a level of 2.1 per cent, while the one in the other two could be negative at a level of minus 0.9 and minus 0.1% respectively.

"The decline due to coronavirus is already affecting production networks and severely restricts activity in sectors such as tourism, aviation, energy and manufacturing. Infected cases in Europe are increasing daily and economic life is affected as a result,” the institute said.

The wiiw examines four possible scenarios for the performance of the economy of Central, Eastern and Southeast Europe, and in the current situation the most likely is the “bad” scenario, according to which the region's growth this year will be within 1.1%. It would be the worst 12 months for countries since the financial crisis.

"Countries that are dependent on exports in the energy sector (Russia and Kazakhstan) or on tourism (Croatia, Slovenia, Albania and Montenegro) are likely to be most seriously affected. The leakage of a capitol is a major risk”, the wiiw added.

Institute experts keep their forecast beyond 2020 largely unchanged. For the period 2021-2022, growth will remain below 3% for EU member states in the region, while Western Balkan countries may be more significant.

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Administrator • 2020-03-07 13:30:05