24.10.2024
The International Monetary Fund (IMF) has revised down its growth forecast for Bulgaria's economy for 2024, lowering expectations from 2.7% to 2.3%. This is yet another signal of slowing economic growth in the country amid global economic challenges, protectionism, and trade wars. The forecast for 2025 has also been revised down to 2.5%.
The main factor behind the lowered expectations for Bulgaria is the weaker industrial production and a decline in exports. The IMF reports that external demand remains weak, and economic growth is primarily sustained by domestic consumption. Additionally, the fund highlights the slow absorption of EU funds and delays in payments under the National Recovery and Resilience Plan (NRRP) as further challenges for the country's economy.
According to the IMF, inflation in Bulgaria will decrease to 2.8% in 2024 and is expected to reach 2.6% in 2025. Despite these decreases, inflation will remain stable at around 2% over the next few years. Unemployment is also expected to remain at low levels, with a slight decline to 4.2% by 2025.
The IMF notes that the global economy remains resilient in the face of inflationary challenges, managing to avoid a recession. Global growth projections are maintained at 3.2% for 2024, but the fund warns of the growing risk of protectionism and trade wars. Such measures could reduce global economic output by up to 1.3% by 2026 if a significant portion of world trade is affected by higher tariffs.
For businesses, these forecasts highlight the need for flexibility and adaptation to changing market conditions. Companies relying on exports, especially to European markets, may face challenges related to weak external markets and constrained demand. However, stable inflation and low unemployment create conditions for relative stability in the domestic market.
The IMF forecasts indicate that domestic consumption will continue to play a key role in Bulgaria’s economy. For companies, this means that it is essential to continue developing their internal markets and strengthening ties with local partners.
While there is some economic uncertainty at both the national and global levels, Bulgarian businesses still have opportunities for growth and stability. It is crucial for companies to monitor global trends, adapt to changes, and continue seeking ways to improve their competitiveness by investing in innovation and diversifying their markets.
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Source: Capital
Read the article by Vasil Minkov: IMF Lowers Bulgaria’s Economic Growth Expectations to 2.3% This Year
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