Bulgaria's economy showed few signs of a sustained recovery in 2013, says EBRD’s latest Regional Economics Prospects report.
Export performance continued to improve but weak internal demand means that growth in 2013 is likely to have been slightly lower than the 0.7 % growth recorded in 2012.
On the positive side, the fiscal deficit is under control and public debt is among the lowest in the EU.
Inflation remains low but this reflects to some extent the series of cuts in utility prices over the past year, which could have negative implications for future investment in the sector.
The bank has revised downwards its forecast for Bulgaria's economic growth in 2014 to 1.8%.
Growth will be driven by exports and some recovery in domestic private consumption, according to the bank.
Bulgaria's 2014 budget is based on an assumption of an 1.8% rise in gross domestic product, while the European Commission forecasts 1.5% after an estimated 0.5% growth in 2013. The economy expanded 0.7% in the third quarter.