Bulgaria’s GDP May Mark 3-Percent Growth in 2021 But Progress Depends on Vaccination Rates

In an interview for BTA, Institute for Market Economics (IME) senior economist Petar Ganev forecasts that in a good-case scenario, if in the summer Bulgaria has made significant progress with the COVID-19 vaccination campaign, thus removing concerns over a new shutdown of the economy in autumn, the country's GDP could grow by some 3 per cent in 2021 and even by 4 to 5 per cent in 2022. In a bad-case scenario, a new shutdown, albeit a partial one, in the autumn due to a slow vaccination campaign, emergencies caused by new coronavirus strains or low vaccine efficacy, would continue to suppress the potential of the Bulgarian economy.

  According to preliminary data of the National Statistical Institute, last year's real GDP decreased by 4.2 per cent from
2019, Ganev says. He recalls that in mid-2020, the state budget was updated and the Government expected a GDP drop of 3 to
slightly over 3 per cent in the best-case scenario, while the central bank's forecast was gloomy: a drop of up to 8 per cent.
At the end of 2020, however, most institutions rallied around the expectation of a 4 per cent GDP drop. The economist notes
that there are worse examples in Europe, with some southern countries hit harder by the pandemic experiencing a 10 per cent
drop. In his words, the big question is how the economic recovery will look like and whether Bulgaria will manage to
create jobs, because in most areas the unemployment rate has increased by some 2 percentage points.

According to Ganev, Bulgaria sits relatively well among the EU Member States in the one-year period of living in a pandemic.
This is because, on the one hand, this country was not hit so hard by the first wave of COVID-19 in March-April 2020 and
Bulgaria's...