Bulgaria’s GDP growth to slow down to 1.7% in 2023, according to OECD

23.11.2022 Source: OECD; FFBH

In its November 2022 Economic Outlook report, the Organization for Economic Co-operation and Development (OECD) expects Bulgaria’s GDP growth to slow down to 1.7% in 2023. This is 0.6% downward revision, compared to the June 2022 Outlook. The lower expectations reflect deteriorating exports, due to the challenging macroeconomic situation in Europe, as well as higher interest rates adversely affecting consumption. GDP growth is expected to accelerate to 3.1% in 2024 on the back of investments from EU funds. Inflation is expected to slow down in 2023 to 7.5%, but still remain well-above the 2% target. The budget deficit, assuming current commitments implemented until the end of the year are upheld in 2023, is projected at 4.3% of GDP. While this would be a clear breach of the Maastricht criteria, OECD still envisions euro adoption in 2024. The Organization highlighted the need for deep structural reforms in order to strengthen the convergence process, while warning that political uncertainty and the risk of maintaining support measures longer than necessary and delaying fiscal consolidation could have adverse effects on the economic outlook.