The BNB raised its forecast for GDP growth, but the risks remain

The Bulgarian National Bank (BNB) revised upwards its forecast for Bulgaria's economic growth in the period 2021 - 2023. For the current year the central bank expects GDP to grow by 4.1%, for 2022 it is planned to grow by 4, 6%, and in 2023 - 3.5%.

For comparison, the BNB's March forecast was for 3.8% GDP growth in 2021, 3.9% in 2022, and then to slow to 3.2% in 2023. Argument for the improved forecast in June is that vaccination campaigns in the Member States of the European Union (EU) will be accelerated in view of the planned provision of vaccines, as restrictive measures against the spread of COVID-19 will be lifted in phases in the second half of 2021, and their final elimination will take place in early 2022

Another assumption is that the dynamics of real GDP is related to the funds that are expected to be received in Bulgaria for the implementation of projects under the National Plan for Recovery and Sustainability, as well as the change in net exports. It is envisaged that the bulk of the expected EU grants will be implemented in the form of fixed capital investments in the general government sector, and a smaller part will be used as capital transfers to the private sector and current transfers.