Looming Recession to Fuel Further Bulgaria's Jobless Rate

Business | April 25, 2012, Wednesday // 11:32|  views

Bulgaria's jobless rate passed a few months ago the threshold of 10% considered to be a sign of an upcoming deterioration in the purchasing power and labor market. Photo by EPA/BGNES

Bulgaria's jobless rate in will continue to increase in 2012 as the economy hovers on the brink of its second recession in three years in the wake of the slump in the euro zone, analysts have warned.

The unemployment rate stood at 11.5% last month with the total number of people who are unemployed towering to 376 171, up by 10,000 over the previous month, data of the Employment Agency shows.

The threshold of 10% is considered by employers and economists to be a sign of an upcoming deterioration in the purchasing power and labor market.

The majority of the people, who were laid off, worked in the industry, trade or construction sectors.

Sofia city remains the location with the lowest unemployment rate. The cities where finding a job is very difficult are Smolyan, Targovishte, Montana and Shumen.

Bulgaria's economy is expected to shrink in the first quarter of 2012, to be followed by a few more quarters of falling output, entering a technical, recession, the Institute for Market Economics (IME) has forecast.

This would be the second recession in Bulgaria in just three years.

Tumbling levels of exports and industrial production show that Bulgaria's economy is already feeling the chill from the euro zone, according to the experts.

This has left domestic demand as the major driving factor behind the economy, but expectations are that it will remain subdued due to a rising unemployment rate and a drop in investments.

Bulgaria's government and the European Commission recently revised downwards their forecast for the economy of the Balkan country, estimating it is to grow 1.4% this year due to worsening growth prospects in key trading partners across Europe and stagnant domestic demand.

Bulgaria's economy expanded by 1.7% in 2011.

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Tags: unemployment, jobless rate, European Commission, zone, European Union, EU, 2012, area, euro, budget deficit, fiscal reserve, loans, GDP, economic growth, investments, direct foreign, unemployment, employment, Bulgaria, Eurozone, recession, current account, exports, Bulgarian, growth, forecast, domestic demand, BNB


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