Ernst&Young: Budget, EU Troubles Keep Bulgaria in Recession

Analysis by Ernst & Young has cast doubt on swift economic recovery for Bulgaria and Europe.

Stringent budget policy measures introduced in Bulgaria and the dim economic situation in the EU are going to slow down economic recovery in the country, according to an Ernst & Young report on the economic situation in Europe, quoted by Dnevnik.bg.

The new, stricter budget policy in Bulgaria raises the risk that growth is suppressed below expected rates, states the analysis.

Ernst & Young forecasts a shrinking of 1% of the Bulgarian economy for 2010 and growth of 3.6% for 2011, while the Bulgarian government and the IMF foresee a minimal growth for the current year.

Small European economies – like Bulgaria's – that have export as a driver for growth will experience troubles in view of the overall economic situation in Europe.

The report also mentions worries about debt crisis on the Continent. Growth in the Eurozone is forecast to be 1-2.5% lower than that in the US for the next five years.

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