In its September 2023 Regional Economic Prospects report, the European Bank for Reconstruction and Development (EBRD) increased its GDP growth forecast for Bulgaria to 1.6% for 2023 (+0.3 p.p. revision). However, growth for 2024 has been trimmed to 2.6% (-0.3 p.p. revision). The EBRD noted that the economy is cooling down amid weaker external demand and an inflation-caused consumption deceleration. However, the effect of the latter may be offset by greater investor confidence on account of the newly formed coalition government, and planned fiscal consolidation. And despite the growth being expected to pick up next year, the EBRD highlighted the energy price shock, protracted weakness in key trading partners and political risk as key downside risks. Overall, the GDP growth in the EBRD regions is expected to accelerate to 2.4% in 2023, an upward revision of 0.2 p.p. from May, reflecting expectations of faster growth in Central Asia partially offset by weaker growth in Emerging Europe. At the same time, the growth forecast for 2024 was downgraded by 0.2 p.p. to 3.2% mainly due to the base effect of higher growth now expected in 2023. The EBRD also noted that slowing growth in China constitutes a notable risk to the outlook, as the continued weakness in the country’s real estate sector is weighing on investments.