Bulgaria GDP Expands by 0.2% in Q3 y/y

Bulgaria's gross domestic product marked a slight increase of 0.2% in the third quarter on an annual basis after adjusting to seasonal variations, the statistics institute flash estimate showed on Friday, well below analysts' forecasts.

Bulgaria's gross domestic product grew 0.3% sequentially in the third quarter, according to the official data.

Analysts expected Bulgaria's GDP to expand 0.5% on an annual basis in the third quarter and between 0.7% and 1% on a quarterly basis.

The gross value added of the total economy went up by 0.1% on a quarterly basis in the third quarter. In final use components, exports of goods and services increased 9.1% over the previous quarter.

The decrease in final consumption expenditure is continuing and now stands at 3.7% in comparison with the second quarter. Gross capital formation and imports of goods and services also dropped by 2.3% and 2.2% respectively.

Bulgaria, the European Union's poorest country, faced its first recession in 12 years after a three-year lending boom stalled and foreign investment dried up.

Bulgaria's gross domestic product (GDP) shrank 1.4% year-on-year in the second quarter, slightly milder that the 1.5% drop forecast by a flash estimate, the statistics office said at the beginning of September.

Meanwhile, the gross value added rose 0.5% compared to 1.1% decline reported in the preliminary estimate.

The fall of Bulgaria's gross domestic product (GDP) slowed to 3.6% on an annual basis in the first quarter of 2010 from 5,9% in the previous quarter. The country's gross domestic product shrank 5% last year.

Bulgaria's government has revised up to 1% its economic growth forecast for this year as recovering exports bolster the expansion.

Prime Minister Boyko Borisov's government previously estimated the economy would grow 0.3% after a 5.1% contraction in 2009 as investments dwindled and consumption shrank.

The government has pledged to stick to a tight fiscal policy and keep the deficit below 3 % by the end of this year.

The recovery of the Bulgarian economy, which operates in a currency board regime, is lagging behind that of other Eastern European countries.

Analysts from local think-tanks have forecast that Bulgaria's economy is likely to continue to contract in the second half of this year and may fail to return to growth earlier than next year.

The European Commission said last month that Bulgaria's economy is likely to start to recover towards the end of 2010 under the impact of the international cycle.

The International Monetary Fund expects Bulgaria's economy to grow from 0% to 0.4% in 2010.