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Bulgarian central bank cuts GDP growth forecast, sees inflation up

01/28/2022 | 11:47am EDT

SOFIA, Jan 28 (Reuters) - Bulgaria's central bank cut its forecast for 2022 economic growth on Friday to 3.6% from a previous 4.7%, mainly due to an expected slowdown in private consumption, restrained by surging inflation.

The central bank sees the country's EU-harmonised inflation, fuelled by a global surge in energy costs, easing in the second half of the year, but still at 7.5% at the end of 2022. Bulgaria's consumer prices jumped by 6.6% at the end of 2021.

In its previous forecast, published in October, the central bank estimated a 1.5% inflation rate at the end of 2022.

"We expect GDP growth to slow to 3.6% in 2022 mainly due to significantly slower growth in private consumption," the central bank said.

It sees private consumption dropping to 2.8% in 2022 from 7.5% last year as an expected jump in consumer prices hits households' disposable incomes and appetite for spending.

The central bank expects the small and open economy to have expanded by 3.7% in 2021.

The finance ministry estimates the economy grew 3.7% in 2021 but it is more upbeat for 2022, seeing the expansion accelerating to 4.8% on the back of planned public investments and inflows of EU funds. (Reporting by Tsvetelia Tsolova; Editing by Hugh Lawson)


© Reuters 2022
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