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Bulgaria GDP Set to Grow Slightly in Q3 - Analysts

Friday, Nov 12, 2010

Bulgaria's gross domestic product is expected to mark a slight increase in the third quarter this year, analysts say days before the statistics institute issues its flash estimate.

"Bulgaria's GDP growth will mark a 0.5% increase on an annual basis in the third quarter," Nikolay Vassilev, CEO and member of the Board of Expat Capital, told the business site investor.bg.

Vladimir Karolev, a managing partner at the Balkan Advisory Company, makes the same forecast, while according to financial consultant Boyan Ivanchev the increase on a quarterly basis will be between 0.7% and 1%.

Bulgaria, the European Union's poorest country, faced its first recession in 12 years after a three-year lending boom stalled and foreign investment dried up.

Bulgaria's gross domestic product (GDP) shrank 1.4% year-on-year in the second quarter, slightly milder that the 1.5% drop forecast by a flash estimate, the statistics office said at the beginning of September.

Meanwhile, the gross value added rose 0.5% compared to 1.1% decline reported in the preliminary estimate.

The fall of Bulgaria's gross domestic product (GDP) slowed to 3.6% on an annual basis in the first quarter of 2010 from 5,9% in the previous quarter. The country's gross domestic product shrank 5% last year.

Bulgaria's government has revised up to 1% its economic growth forecast for this year as recovering exports bolster the expansion.

Prime Minister Boyko Borisov's government previously estimated the economy would grow 0.3% after a 5.1% contraction in 2009 as investments dwindled and consumption shrank.

The government has pledged to stick to a tight fiscal policy and keep the deficit below 3 % by the end of this year.

The recovery of the Bulgarian economy, which operates in a currency board regime, is lagging behind that of other Eastern European countries.

Analysts from local think-tanks have forecast that Bulgaria's economy is likely to continue to contract in the second half of this year and may fail to return to growth earlier than next year.

The European Commission said last month that Bulgaria's economy is likely to start to recover towards the end of 2010 under the impact of the international cycle.

The International Monetary Fund expects Bulgaria's economy to grow from 0% to 0.4% in 2010.

Source: novinite.com