The European Commission has improved slightly its projection for Bulgaria's gross domestic product (GDP) real growth in 2021 to 2.7%, from 2.6% projected in November, it said on Thursday.
At the same time, the Commission lifted its forecast for Bulgaria's economic expansion in 2022 to 4.9% from 3.7% projected in the autumn, as it expects strong domestic demand and more buoyant exports next year, the EU's executive body said in its Winter 2021 Economic Forecast report.
According to the Commission, Bulgaria's domestic demand will remain subdued in the first half of this year, given the assumed extension of containment measures.
"The eventual re-opening of the economy should provide a boost to consumption and investment in the second half of 2021," the Commission said.
Goods exports are expected to gradually recover from the second quarter of 2021 onwards, while foreign tourist arrivals are expected to increase in the third quarter. The recovery in foreign tourism, however, is subject to a downside risk linked to the relative rates of vaccination and contagion in Bulgaria compared to alternative tourist destinations.
As regards Bulgaria's economic performance last year, the Commission said that GDP is estimated to have fallen by 4.9%, compared with a 5.1% decline projected in November.
In late November 2020, a second wave of the coronavirus pandemic led to the re-introduction of containment measures which are still in place and which continue to weigh on household consumption and business sentiment in trade and services. Furthermore, the pandemic has led to a significant loss in revenues from foreign tourists, which typically account for around three quarters of revenues from tourist accommodation, the Commission noted.
On Wednesday, Bulgaria's statistical office NSI said that the total revenue from tourist overnights spent in Bulgaria fell by 71.3% year-on-year in the last month of 2020, to 15 million levs ($9.3 million/7.7 million euro), due to the coronavirus crisis. Revenues from overnights spent by foreign nationals declined by 82.3% on the year.