Bulgarian Economists Forecast Smaller GDP Growth for 2011

The Center for Economic Development has announced its forecast that Bulgaria will overcome the economic crisis at the end of 2010 or at the beginning of 2011 the earliest.

According to the experts' report, announced Monday, the economy of the country has shrunk by 1% in the second trimester, in comparison to the first trimester, when the compression has been 3,6%.

The Center has criticized the macro framework of the state budget, according to which Bulgaria's GDP will grow by 3,6% in the next year. The experts have been firm that this is a very optimistic forecast, which could be risky for the 2011 state budget.

The report has also stated that during the second trimester Bulgaria has experienced a raise in the manufacturing and a slowdown of the drop in the services, trade and construction.

“The domestic consumption has remained low due to the delayed salaries and pensions, as well as the still high unemployment. The lack of enough sectors, producing for export, as well as the drop of the foreign investments in the country, are the main reasons for forecasting the decline of the economy,” said Georgi Prohaski, head of the Center for Economic Development.

Prohaski has explained that despite showing some separate signs for improving, the recovery of the Bulgarian economy is slowing down. He added that economic growth in the country could be experienced in the last trimester of the year, or rather the first trimester of 2011 the earliest.

“The probability for having an economic growth of more than 1,5-2% for the next year is very low. This was the reason for our critics towards the 2011 state budget framework because it puts at risk the stability of the budget,” he said.

According to the him, insurance fees should not go up before 2012, when the country will finally overcome the economic crisis.

Prohaski has also called upon the government to not lose its goal for entering the euro zone because, in his words, this is the only tool for a permanent support for the businesses in Bulgaria.