Sofia, Bulgaria: European Union – UN predicts GDP growth of 3.7% in 2022 for the country. This prediction percentage is less than the previous projection of November month, witnessing a decline of 0.4%. EU also reported a projection of GDP growth of 3.9% for the forthcoming year.Â
The report’s statement asserts, “Both exports as well as the domestic demand, also stimulated by the RRP-funded investments, are set to support the growth. Disposable income is forecast to increase in real terms despite the higher inflation.”
EU’s predictions also note that the higher energy and food prices will deteriorate the purchasing power of low-income households in the dearth of additional compensations.Â
Meanwhile, Energy-intensive production will also witness challenges to remain competitive. TheÂ
The extent of the indirect effects of high energy prices and the decisions of the national regulator on “how to modify the retail prices to the desired evolution of wholesale prices” will determine the inflation in the ongoing and 2023. The regulated electricity prices will witness a hike of 15% in the midst of 2022 and 20% in the midst of 2023.Â
“These factors are set to contribute to the persistence of energy inflation leading to 6.3% and 3.9% headline inflation in 2022 and 2023, respectively,” the report’s statement further underscores.Â
In 2021, the GDP of Bulgaria grew by 4%, where private consumption witnessed higher growth. Meanwhile, the back of favourable labour market conditions, strong consumer confidence and strong income growth, supported also by increased pensions and transfers, EU noted.Â
The National Statistical Institute (NSI) shared the data, which notes that the GDP of Bulgaria rose by 4.6% on an annual comparison basis.Â
“On the other hand, the investment underperformed in 2021. It was held back by persistently high uncertainty with regard to the COVID-19 pandemic condition, the introduction of containment measures and the external environment,” the report further adds.Â