Bulgaria's Economic Outlook: OECD Forecasts 2.8% Growth in 2024

The Organisation for Economic Co-operation and Development (OECD) has revised Bulgaria's economic growth forecasts in its latest World Economic Outlook report, signaling a 1.7% growth rate for 2023, slowing due to external factors, with a projected acceleration to 2.8% in 2024.

Initially anticipating a 1.9% GDP growth for 2023 and 3.2% for 2024, the OECD's updated forecasts reflect the nation's weaker-than-expected external environment this year.

Bulgaria's economic landscape witnessed a surge in household credit fueled by low interest rates, fostering private consumption. However, the OECD reports a deceleration in this consumption trend while projecting a positive impact on investments due to the EU disbursements.

The report highlights Bulgaria's inflation at 9.5% in 2023, expected to ease to 4.5% in 2024, primarily attributed to declining energy prices. However, looming risks in persistent inflation are associated with proposed minimum wage hikes and fluctuations in global energy prices.

Persistent labor shortages create upward pressure on wages and demand, potentially hindering inflation mitigation efforts, as outlined in the OECD's findings.

The OECD emphasizes the necessity for structural reforms, especially considering Bulgaria's shrinking workforce and the imperative to retain its youth within the nation. While acknowledging existing climate policies, the report emphasizes the urgency of a comprehensive green transition strategy.

Bulgaria's recent economic data for the third quarter of 2023 reflects a 1.7% GDP growth, supported by real interest rates and a robust labor market that fueled consumption and investments. Despite a decline in annual inflation from its peak in September 2022, Bulgaria faces challenges...