Bulgaria Economy Grows 2.5% in Q1 y/y

The government expects an export-led recovery to push up growth to 3.6% this year. Photo by BGNES

Driven by strong exports, the Bulgarian economy expanded by 2.5% in the first quarter on an annual basis, well above analysts' forecasts, flash data of the statistics office showed on Friday.

The country's gross domestic product grew by 0.4% quarter-on-quarter, following a 0.5% expansion in the previous quarter, downwardly revised from 2.1%.

The data, which marks the first considerable increase in economic growth since the country plunged into a recession, overshoots analysts' forecasts, which set the GDP growth levels at about 1.5%.

The economy expanded on an annual basis for the second straight quarter.

Exports increased by 22.2% from January through March in comparison with the same period a year ago, but domestic demand and investments dropped by 2.1% and 2.7% respectively.

"Exports were the strongest drivers of growth in the first quarter of the year as well and now we have zero foreign trade balance. In nominal values exports and imports are growing rapidly, but so far the decline in consumption and investments keep purchases from abroad at low levels, " Tsvetoslav Tsachev, chief analyst at Elana, told Dnevnik daily.

According to Lachezar Boganov, analyst at the Industry Watch think-tank, the levels of investments in facilities will be crucial for pulling the country out of the crisis.

The government expects an export-led recovery to push up growth to 3.6% this year.

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