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Raiffeisenbank: GDP growth was lower than expected in 2011, the effects from the Eurozone recession are already being felt in the Bulgarian economy
12 March 2012
Raiffeisenbank (Bulgaria) EAD published the second issue of its monthly economic review for 2012. The analysis notes the strong deceleration of economic growth in the last quarter of 2011 to scarcely 0.3% yoy. The annual GDP growth rate of 1.7% stands below the expectations of the bank whose earlier forecast was for 2% growth. The issue also pays attention to the fact that the decrease in the number of employees which amounted last year to 15.4 thousand, was entirely borne by the private sector, while in the public sector there even was a slight increase. A better than the projected as a fiscal target budget deficit is given an account as well as the good performance of the C/A which recorded a surplus for the first time since 1997. According to the banks’ analysts, in 2011 there was a strong fall in the amount of net foreign direct investment – from EUR 1.6 bn in 2010 to EUR 940 mn.
„The shadow of the Eurozone recession, which is already a fact according to the Eurostat figures, starts also being felt in the Bulgarian economy.”, commented the Chief Economist of Raiffeisenbank (Bulgaria) Kaloyan Ganev. „The direct effects could already be seen in the last months of the past year when in a number of economy branches decreases of production were reported, and as a whole company profits in the economy stepped down on an annual basis. The registered decreases of consumption and investment reflect those processes although households and companies were undoubtedly also influenced by the ceaseless flow of negative information coming from Europe. The decline of employment, respectively the rising unemployment, additionally aggravate the condition of the anyway weak domestic market.”, Ganev added.
