Bulgaria’s economy will expand 1.4 percent this year, and 2 percent in 2014 after an estimated growth of 0.8 percent in 2012, as rising domestic demand offsets declining exports, the European Commission said in a forecast.
A recovery in private consumption was the main driver of growth, along with public projects and investment in the energy industry, the executive arm of the European Union in Brussels said today. The “growth pattern is forecast to continue,” the commission said. EU-harmonized inflation will rise to 2.6 percent this year and 2.7 percent in 2014, from 2.4 percent in 2012, it said.
Bulgaria’s fiscal deficit is set to widen to 1.3 percent of gross domestic product in 2013 after 1 percent of GDP in 2012 on increased social spending including a planned 9.3 percent pensions increase from April 1, according to the commission. The deficit is forecast to revert to 1 percent of GDP in 2014.
Bulgaria, which survived the global crisis without borrowing from international lenders, is moving toward early elections after the government of Prime Minister Boyko Borissov resigned amid protests two days ago.