World Bank maintains Bulgaria's 2021 GDP growth forecast at 2.6%

World Bank maintains Bulgaria's 2021 GDP growth forecast at 2.6%

The World Bank said it expects Bulgaria's real gross domestic product (GDP) to expand by 2.6% this year, keeping its March projection unchanged.

The country's economy is forecast to speed up to 3.3% in 2022, reaching its pre-crisis level of real output, and then increase further to 3.4% in 2023, the World Bank said in the June edition of its Global Economic Prospects report published on Tuesday.

Bulgaria's economic output is estimated to have declined by 4.2% last year, the report showed.

The World Bank noted that its baseline scenario assumes that vaccinations in Bulgaria will gain momentum in the second and third quarters of 2021, which will gradually help restore consumer and business confidence. With expectations of reduced infection rates in the summer and increased inoculations in Bulgaria’s main market, the EU, external sales of goods are likely to recover, but tourism is expected to remain below pre-crisis levels.

In Central Europe, which includes Bulgaria, Croatia, Hungary, Poland, and Romania, growth is projected at 4.6% in both 2021 and 2022, supported by a recovery in trade.

"Exceptional policy accommodation is expected to continue through 2021, and sizeable EU fund packages for member states should help mitigate weakness in investment," the World Bank said.

Growth in the Western Balkans region, which comprises Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia, and Serbia, is forecast to rebound to 4.4% this year and moderate to 3.7% in 2022, assuming consumer and business confidence revives as vaccination takes place and political instability eases, the report read.

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