World Bank Sets Bulgaria Economic Growth at Meager 0.6%Finance | June 13, 2012, Wednesday // 19:17| views
Outgoing World Bank President Robert Zoellick speaks during the second meeting of the International Corruption Hunters Alliance (ICHA 2012), at the International Monetary Fund IMF Headquarters, in Washington, DC, USA, 05 June 2012. Photo by BGNES
The World Bank has revised sharply downwards forecasts for Bulgaria's economy, estimating it is to expand just 0.6% this year.
The bank expects Bulgaria's gross domestic product (GDP) in 2013 and 2014 to grow by 2.5% and 3.3% respectively.
Developing nations should brace themselves for weak growth and "tougher times", the World Bank warned.
It said that there may be "a long period of volatility in the global economy" as the eurozone debt crisis escalates.
The bank forecast that developing economies will grow by 5.3% this year, down from 6.1% in 2011.
It urged policymakers to take adequate long-term measures to ensure that they can sustain growth.
"Developing countries should focus on productivity-enhancing reforms and infrastructure investment instead of reacting to day-to-day changes in the international environment," said Hans Timmer, director of development prospects at the World Bank.
The World Bank warning comes amid heightened fears about the euro zone debt crisis spreading to the region's bigger economies such as Spain and Italy.
"The problems are serious and developing countries should reckon with a long period of low growth in Europe," the World Bank said.
At the beginning of May the European Commission slashed its forecast for Bulgaria's economy, estimating it is to grow just 0.5% this year.
The European Union executive previously estimated that the economy of the Balkan country will grow 1.4% this year due to worsening growth prospects in key trading partners across Europe and stagnant domestic demand.
A month earlier Bulgarian analysts and institutions unanimously cut their growth forecast for 2012 to just below 1.5% instead of the previously forecast 2-3%, citing slumping exports and stagnant domestic demand.
The central bank BNB estimated Bulgaria's economic growth to slow-down to 0.7% in 2012, citing the sovereign-debt crisis in the euro area.
Bulgaria's economy expanded by 1.7% in 2011.
Following the output contraction in late 2011, the EU economy is estimated to be currently in a mild recession. The eurozone economy is forecast to shrink this year as its debt crisis continues to bite.
The European Commission's spring forecast confirmed its prediction of a 0.3% contraction in 2012 in the economies of the 17 countries that use the euro.
It predicted growth of 1.0% for the eurozone in 2013.
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