Bulgaria Economy May Slow Down

Bulgaria has posted impressive growth rates during the past few years but recent forecasts suggest that the economy may be entering a slowdown period. Unemployment rates are at an all-time low and inflation rates are up, sparking risks of overheating, Novinite quoted Fitch as saying. This high rate of economic activity combined with a labor shortage is dramatically pushing up wages, boosting consumer confidence across the country. “We do believe that these economic growth rates are unsustainable and that the economy may be at risk of overheating. The inflation rate has been steadily increasing since 2016, where it went from -1.3% y-o-y, to an estimated 2.2% for 2018. Unemployment is also reaching record lows, estimated to be 6.4% of the labor force, by the end of 2018. While we do not expect a drastic slowdown in economic activity, weakening external demand amid slowing growth among the country’s primary eurozone trading partners, will force growth rates down. Over our medium term period (2018-2022), we are forecasting an average annual growth rate of 3%, but with each year’s growth rate slower than the year before,” Fitch said.