EC Revises Up Forecast for Bulgaria's Economic Growth to 1% in 2015

Brussels, May 5 (BTA) - The European Commission revised up its
economic growth projection for Bulgaria to 1 per cent in 2015 in
 its Economic Forecast: Spring 2015 published on Tuesday. The
winter forecast, published in February, projected growth at 0.8
per cent.

The assessment of GDP growth in 2014 was also revised up, from
1.4 per cent to 1.7 per cent.

Growth is expected to slightly pick up to 1.3 per cent in 2016.

After benefiting from low inflation and the fall in fuel prices
towards the end of 2014, private consumption in Bulgaria is
expected to slow down in 2015 in line with weak wage and
employment growth, according to the country-specific forecast.

Public investment growth's contribution to growth is projected
to turn slightly negative in 2015, as the 2007-13 programming
period is coming to an end and the government looks to implement
 important consolidation measures. Public investment is expected
 to weaken further in 2016 as EU co- financed projects under the
 new operational  programmes take time to be implemented.

Exports are expected to grow faster than imports over 2015 and
2016, as international demand increases and leads to a positive
contribution of net exports to economic growth. Exporting
industries are also expected to benefit from the depreciation of
 the euro, to which the lev is pegged, especially  given that a
sizeable portion of Bulgarian exports goes to non-euro area
countries, according to the Spring 2015 economic forecast.

Employment in Bulgaria is expected to remain broadly unchanged
in 2015 and 2016, while the decrease in the labour force should
further reduce unemployment to below 10 per cent in 2016.

Inflation is not expected to pick up until well into 2015,
leaving the average rate for the year at around -0.5 per cent,
as  private consumption weakens and international  energy prices
 are projected to remain low. Inflation in Bulgaria is projected
 to pick up to 1.0 per cent in 2016, once the  effect from the
previous fall in oil prices fades.

Economic growth in the EU is benefiting from positive economic
tailwinds. According to the European Commission's Spring 2015
Economic Forecast, these short-term factors are boosting an
otherwise mild cyclical upswing in the EU, the European
Commission said in a press release.

As a result, real GDP in 2015 is now expected to rise by 1.8 per
 cent in the EU and by 1.5 per cent in the euro area,
respectively 0.1 and 0.2 percentage points higher than projected
 three months ago.

For 2016, the Commission forecasts growth of 2.1 per cent in the
 EU and of 1.9 per cent in the euro area.