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EC lowers Bulgaria's 2020 GDP growth forecast, raises 2021 projection
14 02 2020The European Commission (EC) said on Thursday that it has lowered its forecast for Bulgaria's gross domestic product (GDP) real growth in 2020 to 2.9%, from 3.0% projected in November.At the same time, the EU institution lifted its projection for Bulgaria's economic expansion in 2021 to 3.1% from 2.9% forecast previously, it said in its Winter 2020 economic forecast.According to the Commission, Bulgaria's real GDP growth is expected to slow significantly in 2020 and 2021 due to weaker domestic demand growth. "Although private consumption is forecast to remain the key growth driver, its contribution to economic expansion is set to decline on the back of lower employment growth," the Commission said.Investment is unlikely to compensate for the slower consumption growth this year and is set to increase only slightly in 2021, along with somewhat stronger export growth, it commented."Unprocessed food and energy prices are expected to sustain inflation around 2.3% in 2020, while the assumed path of oil prices is set to hold inflation at 1.9% in 2021," the Commission added.Bulgaria's real GDP growth accelerated to an estimated 3.7% last year, from 3.1% in 2018. The country's economic growth in 2019 was driven by consumption, especially in the first half of the year, which compensated for the relatively weaker external demand and higher uncertainty abroad during the period.According to the Commission, investment contributed only marginally to Bulgaria's 2019 GDP growth."Exports were negatively affected by a deterioration in foreign demand and became more volatile. Imports stagnated in real terms, curtailed by reduced inventories and less dynamic investment in productive equipment," it noted. The Commission confirmed its earlier forecast for both the euro area and the EU. Economic growth in the euro area is expected at 1.2% in 2020 and 2021, while EU's economic growth is estimated at 1.4% for both this year and the next one.