UniCredit SpA, Italy’s biggest bank, cut Bulgaria’s growth forecast for this year on concern the euro-area crisis reduced investment and demand for the country’s exports in the European Union.
Bulgaria’s gross domestic product will probably expand 0.5 percent in 2012, down from a previous forecast of 1.5 percent on Dec. 15, UniCredit said in an e-mailed statement today. The economy will expand 1.5 percent next year, as the effect of Europe’s debt crisis diminishes, the bank said.
Bulgaria ships 60 percent of its exports to the EU. The bloc’s poorest country in terms of economic output per capita withstood the global financial crisis without a bailout. Its economic growth slowed to 0.5 percent from a year earlier in the second quarter, same as in the first three months.
“Individual consumption will rise next year after the government raises minimum wages and pensions,” UniCredit said in the statement. “As the impact of the debt crisis fades away, investor confidence will improve and there will be more incentives to increase investment and growth.”
Bulgaria’s economy grew 1.7 percent last year, after a revised 0.4 percent in 2010. The European Commission forecasts the economy to expand 0.5 percent this year and 1.9 percent in 2013.