Bulgarian Experts: Unemployment to Exceed 10% in 2010

Business | April 10, 2011, Sunday // 14:55|  views

Bulgarian economy experts say the budget deficit will fall under 3%. File photo

Unemployment in Bulgaria is to reach levels above 10% in 2011, according to a forecast of economy experts from the "Agency for Economic Analyses and Forecasts."

The Association is an NGO, established after the State agency with the same name was closed by Finance Minister, Simeon Djankov, last year.

In addition, the experts predict a 3.8% growth of the economy in 2011 and a 4.7% one in 2012.

The Chair of the Association, Stefan Tsvetkov, sees two main risk factors looming for the country's economy – an election campaign pressure to increase expenses above the ones already slated in the State budget and the staggering number of default loans in the Bulgarian bank system.

Tsvetkov says that the easiest way to stop bad loans is increased credit activities, adding banks in Bulgaria are interested in granting more loans, but are very conservative when it comes to lowering interest rates. Crediting will increase by 7.4% in 2011 and by 9.7% in 2012.

The forecast further includes a slowdown in exports and a continuing recovery of imports.

The budget deficit will fall under 3% while investments in 2011 will be with 5.8% more compared to 2010, with an expected EUR 1.5 M in foreign investments.

The labor market will begin to improve in 2012 to lead to a recovery in demand and consumption.

Inflation in 2011 will reach 3.8% over increasing prices of food and oil, but will fall to 3% in 2012.

Tsvetkov pointed out the recent moratorium on prices of oil products is in essence a cartel agreement with the participation of the State.

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Tags: economy, growth, unemployment, budget deficit, exports, imports, labor market, inflation, bank system, default loans, investment, finance minister, Simeon Djankov, Agency for Economic Analyses and Forecasts, Stefan Tsvetkov, oil, prices, cartel agreement


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