IMF Sees Bulgaria’s GDP Growth at 1.6% in 2014, Picking up Slowly

IMF Sees Bulgaria’s GDP Growth at 1.6% in 2014, Picking up Slowly

The International Monetary Fund (IMF) projects that Bulgaria’s economic growth will accelerate slowly from about 1.6% in 2014 to up to 3.0% in the medium-term.
“Recovery in trading partners and high domestic demand, including through EU funds spending, should underpin growth of about 1.6% in 2014, with a modest increase in prices,” the fund said in a concluding statement after an IMF mission visited Bulgaria. “In the medium-term, growth could reach 3.0%, suggesting only very gradual income convergence with other EU countries,” it added.
Further emigration and population ageing, as well as low projected productivity growth and investment, constitute drags on more rapid growth and job creation, the fund noted.
Bulgaria's government should build support for the reforms it needs to undertake, which, according to the fund, would be a challenge in the difficult political context.
"While the recently announced South Stream project provides possible revenue upside, revenue may underperform if domestic demand recovery is slower than projected, gains from administrative reforms are lower than budgeted, or, as projected by the mission, inflation remains subdued," the fund said in the concluding statement. "Thus, expenditures may need to be restrained to achieve the deficit target."
 
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