BULGARIA’S GDP TO INCREASE BY 2% IN 2011 AND TO REMAIN LESS THAN 2.5% NEXT YEAR

"In the third quarter of the year, the growth of the Bulgarian economy will be in the range of between 1% - 1.5% and it will reach less than 2% for the entire 2011. GDP growth for 2012 will hardly exceed  2.5%, given the actual data for the Bulgarian economy and the situation in Europe," said George Prohasky, Chairman of the Centre for Economic Development (CED), at the presentation of the regular quarterly report of the NGO. 

According to him, a balancing trend of the growth structure has been noticed since the share of the processing industry in GDP will decrease, but the decline will be offset by growth in the service sector. Net exports will shrink but domestic demand will grow.

Prohasky presented the experts' opinions on growth in particular industries. He commented that the agricultural branch will record an increase of up to 2% by the end of the year. In industry, the increasing trend which has been established since the beginning of 2011 will continue, with growth projections of around 7% by the end of the year. The decline in the construction branch will persist but it will be less than that one recorded in 2010, showed the report of CED.

Financial and insurance activities will grow by merely 1.2% - same as the previous year. Real estate operations will end the year with zero growth or a slight decline, forecast CED experts. Final consumption will register growth of up to 2%.

Industry and the service sector, as well as exports will be the key engines of growth. The expected budget deficit will not exceed 2.5% this year. 

According to preliminary data, in the period from January to August 2011, the Foreign Direct Investment (FDI) in the country amounted to €225.6 mln (0.6% of GDP), or just a quarter of the attracted investments in the same period of 2010 of €926.5 mln (2.6% of GDP). The estimates that FDI will not reach the planned amount of €1.5 bn in 2011 are based on this data, read the report.