The European Commission expects that Bulgaria It will come just barely close to achieving the inflation standards required for membership. euro areaAlthough it may not be completely satisfying.
In its latest spring economic forecast published on Wednesday, the European Commission said: BulgariaThe inflation rate was 3.1% in March, slightly above average. euro area Average 2.4%. To meet the criteria, BulgariaThe inflation rate should approximately match the inflation rate of the three countries with the lowest price increases. The forecast also predicts a significant increase in the fiscal deficit from 1.9% to 2.8% of GDP, with economic growth reaching 1.9%.
The inflation forecast is in line with what was expected in February, before the unexpected collapse of the government increased domestic instability. The European Commission's analysis shows that the outlook for lower inflation is due to an expected decline in aggregate wages, limited increases in import prices, reductions in out-of-pocket costs for medicines and the expiration of VAT relief for certain services. It is analyzed that this is due to a variety of factors, including policy decisions such as
The increase in the budget deficit is expected to result from increases in pensions and salaries, but will only be partially offset by state revenues. Furthermore, the loss of energy support, estimated at 0.8% of GDP, will also contribute to the increase in the deficit.
meanwhile european union Fund absorption is expected to peak in 2023 and decline, but the European Commission expects positive effects from implementing investments under the recovery plan, albeit with significant delays. Overall public investment is projected to decline in 2024.
Looking ahead to next year, the European Commission expects inflation to be 2.6%, economic growth to be 2.9% and public debt to decline slightly. The analysis predicts that the fiscal deficit will continue to trend upward in 2025, reaching 2.9% of GDP under current policies.
Despite these challenges, the European Commission remains optimistic. BulgariaThere is the ability to modestly increase the implementation of recovery plans, which could stimulate public investment and economic activity.
Economic outlook for European countries economy The picture is complicated, with consumer spending expected to drive growth, but strong savings trends slowing the pace of expansion. Although financing conditions are expected to improve, investment growth is slowing, mainly due to negative trends in housing construction.
Inflation is expected to fall gradually, reaching 2% by 2025, and wage growth is starting to slow as prices fall. Economic Commissioner Paolo Gentiloni expressed cautious optimism:the worst is behind us'', emphasizing the signs of recovery. european union economygrowth is expected to gradually accelerate in the coming years.
