The European Commission (EC) keeps its expectations for Bulgaria’s economy in its summer forecast. The GDP growth of our country in 2019 will recover to 3.3% from 3.1% in 2018, reaching 3.4% in 2020, coinciding with the expectations of the spring forecast.
In terms of inflation, the EC expects its pace to reach 2.4% in 2019 and will slow to 1.7% in 2020, writes Investor.bg.
In the first quarter of the year, economic growth in the eurozone was higher than expected for temporary reasons, such as mild winter and rising car sales, the EC added in its report, available on the EU executive website.
Growth has also been favored by fiscal policy measures that have made household disposable income in many EU countries rising, the commission said in a statement.
The short-term outlook for the European economy is diminished by external influences, including the tensions in world trade and significant political uncertainty. These impacts continued to negatively affect manufacturing confidence, which is most exposed to international trade, and this is expected to reduce the growth prospects by the end of the year.
As a result, the eurozone gross domestic product (GDP) projection of 1.2 percent in 2019 remains unchanged, while the 2020 forecast is reduced to 1.4 percent due to the expected moderate growth over the rest this year (spring forecast was for growth of 1.5 percent).
The forecast for GDP for the EU remains unchanged – 1.4 percent in 2019 and 1.6 percent in 2020.
While earlier this year growth was favored by temporary factors, the outlook for the rest of the year appears to be weaker as forecasts of a rapid recovery in world production and trade are weakening.
GDP growth is expected to be higher in 2020, which is partly due to the larger number of working days.
Domestic demand, especially household consumption, remains a driving force for economic growth in the EU thanks to the continued expansion of the labor market.