Bulgaria to face slow recovery, lending still subdued - EIU

Bulgaria to face slow recovery, lending still subdued - EIU

Bulgaria's economy will continue to recover but the growth rate will be slower than government expectations, the Economist Intelligence Unit (EIU) said in a new report.

According to the experts, lending will most probably remain subdued, which will in turn dampen consumption. In addition, investment activity is also expected to be modest due to the narrower access to credit resources, the report said.

EIU projects a fragile growth of 2.6% in the country's economy this year, in line with the forecasts of the International Monetary Fund and the World Bank. Bulgaria's gross domestic product (GDP) is seen to expand at an average rate of 3% by 2015.

Consumption is also anticipated to start perking up gradually, but it will continue to weigh on prices, although at a much more moderate level than pre-crisis years. According to the experts, inflation will make up 3.3% in 2011.

EIU is sceptical when it comes to the country's plans to join the eurozone under the current government, projecting this will happen in 2015, but at the same time the service praises the state's decision not to make changes to the currency board mechanism.

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