World Bank Raises Bulgaria 2016 GDP Growth Forecast to 2.2%

The World Bank has increased its forecast for Bulgaria’s economic growth in 2106 by 0.2 percentage points to 2.2%.

"The western part of Europe and Central Asia (ECA) region, which includes Bulgaria, Romania, Turkey, and the Western Balkans, should grow moderately in 2016, buoyed by recovery in the Euro Area, [...] where output is projected to expand by an average of 1.7% in 2016-17 with the support of accommodative ECB policies," the World Bank said in the January 2016 issue of its Global Economic Prospects report.

The World Bank's new growth forecast for Bulgaria is close to the revised projection of 2.1% increase of Gross Domestic Product (GDP) in 2016 made by the Bulgarian government last year.

On Tuesday, Bulgaria’s Prime Minister Boyko Borisov expressed his hope that the country’s economic growth rate would exceed government projections and reach 4.5%. 

In the report, the World Bank has also raised to 2.9% its estimate of Bulgaria’s GDP growth in 2015. This is an increase of 1.8 percentage points from June 2015 projections.

The Bank forecasts GDP growth of 2.7% for Bulgaria in 2017, unchanged from its June 2015 projection. Growth in 2018 is also forecast at 2.7%.

The Bulgarian government has projected economic growth of 2.5% for 2017 and 2.7% for 2018. 

Looking at Bulgaria and Romania, the World Bank says that investment in the two EU member states "is being supported by European Structural and Investment Funds, though absorptive capacity remains a challenge. In view of the heavy reliance on the banking sector to fund investment in the region, financial sector reforms can also play an important role in strengthening the capacity to intermediate credit, thereby boosting investment and job creation".

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