Bulgarian economy has been shrinking in the last trimester of 2020, but the same trend is expected to persist in the first months of 2021 too, forecast UniCredit Bulbank experts in their three-month analysis of economic development of the Central and East European countries.

The bank experts say that loosening of the anti-epidemic measures is expected in March which will result in a better performance of the GDP in the next trimester.  

We expect the GDP to grow significantly in the first trimester of 2021 because the immediate impact of the pandemic on economy will lose its grip and further implementation of financial stimuli will ensure the necessary additional support, the analysts believe.

As regards the business performance of the sectors most affected by coronavirus, UniCredit Bulbank expects that in tourism and similar sectors the activity will remain low, as the “positive effects of vaccination will need time to manifest themselves.”

This will make many people to continue to show caution and still keep physical distance in the summer and autumn of 2021. The pace of the recovery process in economy will depend on the efficacy of the vaccination campaign, the analysis says further.

With a view to the overall economic growth of the whole region, experts expect partial recovery of GDP of about 2,7 percent this year. In their estimation, the recovery within the current 12 months will be weak and slow and the first results will be evident in 2022 and 2023 with expected growth of 4-5 percent.   

“We expect the GDP to reach its pre-crisis levels in the second half of 2021. Supposedly, the economy will start working at full steam by the end of 2023. The risks for our key economic scenario are especially high. This is explained by the fact that the development of economy this year will depend on a combination of epidemiological (pandemic development) and political (the results of the upcoming elections) factors, the experts note.