The European Commission said it has lowered its economic growth forecasts for Bulgaria to 1.7% in 2014 and 2.0% in 2015.
In September, the Commission said Bulgaria was set for a gross domestic product (GDP) growth of 2.0% in 2014.
The Commission expects economic recovery in Bulgaria to broaden in 2014 and 2015 thanks to rising domestic demand, it said in a statement on Tuesday. However, economic growth is expected to be modest, affected by declining population, and labour market is forecast to remain weak.
Inflation is seen accelerating from 0.5% this year to 1.8% next year, while unemployment is expected to shrink from 12.7% this year to 12.1% in 2015.