CENTRE FOR ECONOMIC DEVELOPMENT: BULGARIA’S ECONOMIC GROWTH TO REACH 3% IN 2011

Recovery in construction - for the first time in the last two years

Bulgaria's economic growth will reach 3% in 2011. The expected GDP increase in the fourth quarter of 2010 is between 1.5% and 2%, while for the entire 2010 it will be around 1%, stated the latest report of the Centre for Economic Development (CED) presented yesterday. "Bulgaria slowly and painfully recovers from the crisis," said George Prohasky, Chairman of CED. According to him, at the end of the year, all sectors of the economy will record growth but this fact will be felt by consumers not earlier than 2012. The Government's forecast is for economic growth of 3.6%. CED analysts believe that the estimates of the ministers are exaggerated.

"Civil construction grew by 15% on an annual basis," said Prohasky. This happened for the first time after 2008. According to analysts, the decline in the construction of buildings also slowed down last year to reach 10%. Civil engineering is the engine of recovery in the branch, with production output in the last 6 months exceeding the respective level a year ago. In general, CED's analysts do not expect a rapid growth in construction in the first half of this year.

There are no signs of dramatic price increases in 2011 and this is a prerequisite for low inflation. The estimates are for a 3% increase in inflation this year. "The three indices which determine inflation are stable and are expected to remain so," predicted the Chairman of CED. He commented that this will ensure its stable levels in Bulgaria. Inflation exceeded 4% in 2010.

The unemployment rate continues to decline, albeit slowly, reported CED experts. According to them, the trend is for the number of registered unemployed persons to start diminishing as of March.