Bulgaria's central bank improved its forecast for the economic growth in 2021 to 4.1% in its latest quarterly macroeconomic review released on July 23.
In Q1, its projection was that the economy would expand by 3.8% in 2021 and by 3.9% in 2022.
According to the Q2 forecast, GDP will expand by 4.6% in 2022 and by 3.5% in 2023.
“The dynamics of the real GDP largely reflects the time of distribution of the funds that are expected to be received from Bulgaria for the implementation of projects under the National Recovery and Sustainability Plan, as well as the change in net exports,” the central bank noted.
Internal demand is seen as a major positive contributor to the economic growth, mainly thanks to the private sector. Net exports are also expected to support the economic growth in 2021 and 2022 thanks to expected improved economic activity in Bulgaria's main trading partners.
Inflation is expected to reach 3% at the end of this year, boosted by a significant increase in the prices of energy products and food, while in 2022 it is seen slowing down to 0.7%. In 2023 it is expected to speed up to 1.3.