Macroeconomic Forecast Bulgaria

A flash real GDP estimate for the third quarter shows that Bulgaria's economy stagnated in real terms, with annualised real GDP rising by a paltry 1.3% y-o-y down from 2.0% y-o-y in Q211. We expect real economic growth to continue slowing in the coming quarters as the external environment becomes less supportive of Bulgaria's largely export-led economic recovery. We forecast real GDP to come in at 2.7% in 2012. However, given the rapidity with which the eurozone debt crisis continues to deteriorate, risks to this forecast are skewed firmly to the downside.

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