Bulgarian Economy to Grow by 1% in 2012 - Think-Tank

With the Christmas and New Year holidays due in less than two months, analysts are expecting a surge in domestic demand in Bulgaria. Photo by Sofia Photo Agency

A Bulgarian think-tank has predicted a 1% GDP growth in the country in 2012, echoing the forecast of the International Monetary Fund, which increased last month its earlier estimate of 0.8%.

"Our forecast is for the real GDP growth to exceed 1% in 2012 courtesy of the stronger domestic demand in the second half of the year," Georgi Prohaski, head of the Center for Economic Development, said on Thursday as he presented the think-tank's regular report.

"Only three out of all ten sectors that we are following in Bulgaria's economy are expected to see a decline in their end-year figures. The recorded growth however will be too modest to help accelerate the economy," he added.

The country's unemployment rate is to reach 12% at the end of the year, according to the report.

The Bulgarian economy is expected to expand by 1.5% in 2013 as exports recover, the think-tank forecasts.

In June, the World Bank revised sharply downwards forecasts for Bulgaria's economy, estimating it is to expand just 0.6% this year.

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.

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