WB: Bulgaria’s economy is recovering thanks to strong external demand

18.11.2010

Bulgaria’s economy is recovering thanks to strong external demand, while demand on its domestic market is still lagging behind, read the World Bank (WB) Regular Economic Report on the 10 new member-states (EU10), Bulgaria being among these. The financial institution estimates growth in Bulgaria for 2010 at between 0% and 2%. The figures are the same for the Czech Republic, Hungary and Slovenia.

“Bulgaria registered growth, although rather modest, in Q3 2010 following six consecutive quarters of economic shrinking,” said Kaspar Richter, Senior WB Economist for Europe and Central Asia and one of the report’s main authors. “Removing structural barriers, however, will boost growth and decrease the considerable difference in productivity between Bulgaria and the leading EU economies. Bulgaria could use EU funds to improve its infrastructure and the quality of human capital since the global financial crisis has led to a reduction in private capital flows, the report stated further.

In 2010, Slovakia and Poland are leaders in the region in terms of growth, which is 3.5% or higher, since the economies of these two countries were least affected and they took advantage of the normalisation of global trade and capital flows. Estonia and Lithuania, where GDP shrank by some 15% in 2009, will return to growth estimated at 2%. The economies of Latvia and Romania will contract in 2010.

The upswing is taking root across the EU10 region and recovery is set to strengthen in 2011, the WB report read. Growth across Central and Eastern Europe increased almost fourfold to 2.2% on an annual basis in Q2 2010 vs 0.6% for the first quarter of the year.